Question

John borrowed a certain amount of money from Tebogo at a simple interest rate of 8,7% per year.
After five years John owes Tebogo R10 000,00. Calculate how much money John initially borrowed

Answer 1

Calculation of the princ ipal loan amount:-

Amount = Principal (1 + Rate X Time).

R1000,000 = P (1 + 0.087 X 5).

R1, 000,000 = P (1 + 0.435).

Principal loan $=\frac {R1000,000} {1.435}$

Principal loan = R696,864.11.