Money is borrowed at 10% simple interest. After one year, $980.10 pays off the loan. How much was originally borrowers

Given:

Rate of simple interest = 10%

After one year, $980.10 pays off the loan.

To find:

Original amount of loan.

Solution:

We know that, the simple intersect is

Where, P is principal, r is rate of interest in percent and t is time in years.

Putting r=10 and t=1, we get

Now, the formula for amount is

where, P is principal and I is the interest.

Putting A=980.10 and , we get

Divide both sides by 11.

Therefore, the original amount of loan is $891.