Quandaries
and Queries
Brian wants to borrow some money from Margaret.
After three years he is to pay X back plus one interest sum of 25%.
If he is pays back a total of $3800, what was the original sum borrowed?
What is the formula? I've got quite a few questions like this.
thanks
penny
Hi Penny,
This question looks strange, but let me answer what is asked. Brian borrows $X from Margaret. At the end of three years he pays back the $X plus and interest charge of 25% of the original loan. That is he pays back
$X + 25% of $X
which is
$X + 0.25
$X
This payment is $3800 so
$X + 0.25
1.25
$X = $3800/1.25 = $3040
What I find strange about this problem is that the interest is stated as one payment of 25% of the loan. I would have expected an interest of sume percent per year for three years.
Penny