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.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
=
R
1000
,
000
1.435
=
1.435
R1000,000
​


Principal loan = R696,864.11.