Victor borrowed money at 5.25 percent simple annual interest. At the end of the year, the interest on the loan is $255.94. What was the amount of the loan?
Answer
A
$13.44
B
$134.37
C
$1,343.69
D
$4,875.05
Explanation
For simple interest, I = Prt. Here I = $255.94, r = 0.0525, and t = 1 year, so P = 255.94 ÷ (0.0525 × 1) ≈ $4,875.05. The loan amount was $4,875.05, choice D.
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