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21 October, 22:12

Lisa borrowed money at a 6% simple interest rate. IF she paid back a total of $8000 at the end of 10 years, how much did she originally borrow? Write your answer appropriately as dollars and cents.

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  1. 22 October, 00:03
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    The original amount borrowed = $4,467.158

    Explanation:

    We need to determine the present value

    Present value = FV / ((1+r) ^n)

    FV = $8,000

    r = 6%

    n = 10

    Inserting the figures in the formula mentioned above:

    PV = $8,000 / (1+0.06) ^10

    PV = $4,467.158
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