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.




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 $X = $3800
1.25 $X = $3800
$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.



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