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15 March, 03:36

ermaine's father owes $6,300 in interest at the end of a 60-month car loan at a 7% simple annual interest rate. What was the original loan amount?

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  1. 15 March, 05:13
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    The pertinent formula is i = p*r*t. Here, i = $6,300, r = 0.07 and t = 5 yrs.

    We want to solve this for the principal, p. Since i = p*r*t, p = i / (rt). In this case, the principal was:

    p = $6,300 / [0.07*5] = $6,300 / 0.35 = $18,000
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