Example 6.38 from Prealgebra, 6.4 Solve Simple Interest Applications

Solve Simple Interest Applications: example 6.38

Eduardo noticed that his new car loan papers stated that with an interest rate of $7.5%,$ he would pay $$6,596.25$ in interest over $5$ years. How much did he borrow to pay for his car?

Work it out on paper first. Then open the solution one step at a time, and stop as soon as you can finish on your own.

Your turn

The book's Try It right after this example: same idea, new numbers. Only the answer is given.

Sean's new car loan statement said he would pay $$4,866.25$ in interest from an interest rate of $8.5%$ over $5$ years. How much did he borrow to buy his new car?

How did it go?

Write the formula.	$I = P r t$
Substitute the given information.	$6,596.25 = P (0.075) (5)$
Multiply.	$6,596.25 = 0.375 P$
Divide.	$\frac{6,596.25}{0.375} = \frac{0.375 P}{0.375}$
Simplify.	$17,590 = P$
Check your answer. Is $17,590 a reasonable amount to borrow to buy a car?
$I = P r t$
$6,596.25 \overset{?}{=} (17,590) (0.075) (5)$
$6,596.25 = 6,596.25 ✓$
Write a complete sentence that answers the question.	The amount borrowed was $17,590.

Write the formula.	$I = P r t$
Substitute the given information.	$6,596.25 = P (0.075) (5)$
Multiply.	$6,596.25 = 0.375 P$
Divide.	$\frac{6,596.25}{0.375} = \frac{0.375 P}{0.375}$
Simplify.	$17,590 = P$
Check your answer. Is $17,590 a reasonable amount to borrow to buy a car?
$I = P r t$
$6,596.25 \overset{?}{=} (17,590) (0.075) (5)$
$6,596.25 = 6,596.25 ✓$
Write a complete sentence that answers the question.	The amount borrowed was $17,590.

Solve Simple Interest Applications: example 6.38

Solution

Your turn

Solve Simple Interest Applications: example 6.38

Solution

Your turn