Question

elsa took out a 2-year loan to buy a car at a 6% simple interest rate. if she has to pay $264 in interest, how much principal did she borrow? enter your answer in the box. $

Explanation:

Step1: Recall simple interest formula

The formula for simple interest is $I = P \times r \times t$, where $I$ is the interest, $P$ is the principal, $r$ is the annual interest rate (in decimal), and $t$ is the time in years.

Step2: Convert rate to decimal

The annual interest rate $r = 6\% = 0.06$. The time $t = 2$ years, and the interest $I = 264$ dollars. We need to solve for $P$. Rearranging the formula for $P$ gives $P=\frac{I}{r\times t}$.

Step3: Substitute values and calculate

Substitute $I = 264$, $r = 0.06$, and $t = 2$ into the formula: $P=\frac{264}{0.06\times2}$. First, calculate the denominator: $0.06\times2 = 0.12$. Then, $P=\frac{264}{0.12}=2200$.

Answer:

2200