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QuestionJodi owes \$30 in interest after 3 years at 5\% simple interest. How much did she originally borrow? A) \$150 B) \$200 C) \$220 D) \$300

Studdy Solution

STEP 1

Assumptions1. The borrowed amount is unknown. The interest rate is5%
3. The time for repayment is3 years4. The interest is calculated as a one-time payment, not annually compounding5. The total interest owed is $30

STEP 2

We need to find the borrowed amount. The formula for simple interest isInterest=Principal amounttimesInterest ratetimesTimeInterest = Principal\, amount \\times Interest\, rate \\times Time

STEP 3

We can rearrange the formula to solve for the principal amountPrincipal amount=InterestInterest ratetimesTimePrincipal\, amount = \frac{Interest}{Interest\, rate \\times Time}

STEP 4

Now, plug in the given values for the interest, interest rate, and time to calculate the principal amount.
Principal amount=$30%times3Principal\, amount = \frac{\$30}{\% \\times3}

STEP 5

Convert the percentage to a decimal value.
5%=0.055\% =0.05Principal amount=$300.05times3Principal\, amount = \frac{\$30}{0.05 \\times3}

STEP 6

Calculate the principal amount.
Principal amount=$300.05times3=$200Principal\, amount = \frac{\$30}{0.05 \\times3} = \$200So, Jodi originally borrowed 200.ThecorrectanswerisB)200. The correct answer is B) 200.

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