Question

a 12% simple interest loan was taken out and will be repaid in 18 months , with a payoff of $1062. how much is being borrowed?

Answer 1

The borrowed amount is $900. Here is how it was calculated:

I=(P)(R)(T)
where I=Interest, P=Principal, and T=Time
$1062-P=(P)(0.12)(1.5)

1062-P=0.18P
1062=0.18P+P
1062=1.18P
and P=$900