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17 December, 20:56

What amount of money was loaned if the borrower paid $950 in interest at the end of 6 months and was charged 7% annual interest? $1,083.06 $13,571.86 $27,142.86 $1,900

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  1. 17 December, 21:19
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    The loan amount was $27,142.86

    Explanation:

    Data provided in the question:

    Total interest paid for the loan amount = $950

    Time for which interest is charged = 6 months = 0.5 year

    Annual interest rate = 7% = 0.07

    Now,

    Interest = Principle * Rate * Time

    or

    $950 = Principle * 0.07 * 0.5

    or

    Principle = $950 : 0.035

    or

    Principle = $27,142.86

    Hence,

    The loan amount was $27,142.86
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