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14 November, 10:23

Money is borrowed at 15% simple interest. After one year,$1181.05 pays off the loan. How much was originally borrowed?

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  1. 14 November, 12:42
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    Answer: $787 was originally borrowed.

    Step-by-step explanation:

    The formula for determining simple interest is expressed as

    I = PRT/100

    Where

    I represents interest paid on the loan.

    P represents the principal or amount taken as loan

    R represents interest rate

    T represents the duration of the loan in years.

    From the information given,

    Total amount = $1181.05

    Interest = total amount - principal

    I = 1181.05 - P

    R = 15%

    T = 1 year

    Therefore,

    1181.05 - P

    Therefore,

    1181.05 - P = (P * 15 * 1) / 100

    1181.05 - P = 0.15P

    P + 0.15P = 1181.0

    1.5P = 1181.05

    P = 1181.05/1.5

    P = $787
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