sam borrowed money from a credit union for 2 years and was charged simple interest at an annual rate of 9%…

sam borrowed money from a credit union for 2 years and was charged simple interest at an annual rate of 9%. the total interest that he paid was $36. how much money did he borrow? if necessary, refer to the list of financial formulas.

sam borrowed money from a credit union for 2 years and was charged simple interest at an annual rate of 9%. the total interest that he paid was $36. how much money did he borrow? if necessary, refer to the list of financial formulas.

Answer

Explanation:

Step1: Recall the simple - interest formula

The simple - interest formula is $I = Prt$, where $I$ is the interest, $P$ is the principal (the amount of money borrowed), $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. We are given that $I = 36$, $r=0.09$ (since $9%=0.09$), and $t = 2$.

Step2: Solve the formula for $P$

Starting with $I = Prt$, we can isolate $P$ by dividing both sides of the equation by $rt$. So $P=\frac{I}{rt}$. Substitute the given values: $P=\frac{36}{0.09\times2}$. First, calculate $0.09\times2 = 0.18$. Then, $P=\frac{36}{0.18}=200$.

Answer:

$200$