Question

Mia agrees to borrow a 3-year loan with 4% simple interest to buy a motorcycle

Part A -

If Mia will pay a total of $444 in interest, how much money did she initially borrow?

Part B -

How much interest would Mia pay if the simple interest rate were 5%?

Answer 1

Answer:

Part A : She borrowed $ 3700.

Part B : She would pay $ 555 interest.

Step-by-step explanation:

Since, simple interest is,

$S.I.=\frac{P\times r\times t}{100}$

Where, P is the principal amount,

r is the annual rate of interest,

t is time ( in years ),

Part A :  Here, S.I. = $ 444,

t = 3 years,

r = 4 %,

Thus,

$444=\frac{P\times 3\times 4}{100}$

$\implies P=\frac{444\times 100}{3\times 4}$

$=\frac{44400}{12}$

$=3700$

Hence, She borrowed $ 3700.

Part B :

Here, r = 5 %, t = 3 years, P = $ 3,700,

$\implies S.I.=\frac{3700\times 5\times 3}{100}$

$=\frac{55500}{100}$

$=555$

Hence, She would pay $ 555 interest.