Question

How much money did a farmer borrow at 8% per year if, at the end of 4 years, he had repaid $7,392, which included the interest?

Answer 1

Farmer borrowed `$5600`.

Explanation:

Assuming simple interest was calculated at the end of `4` years at `8%` per year.

`r=8% , t= 4 , A =7392 , P= ? ; r,t,A,P` , where r=rate of interest, t is time in years , A is amount repaid , P is loan taken respectively.

We know `A= P + P*r/100*t or A = P(1+(rt)/100)` or

`P = A/(1+(rt)/100) or P = 7392/(1+(8*4)/100)` or

`P = 7392/1.32 = $5600`

Farmer borrowed `$5600`. [Ans]