The following information is known about a loan.Time = 7 yearsInterest rate = 6%Interest = $840.00What was the principal on the loan?
Answer
A
$200.00
B
$352.80
C
$1,862.50
D
$2,000.00
Explanation
Use the simple interest formula, I = P × r × t. Solving for the principal gives P = $840 ÷ (0.06 × 7) = $2,000, so the principal was $2,000.00, choice D.
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