A new business borrowed money to pay its start-up costs. The maturity value of the loan was $4,500, and the total amount of accrued interest was $350. What was the principal of the loan?
Question
A new business borrowed money to pay its start-up costs. The maturity value of the loan was 350. What was the principal of the loan?
Solution
Sure, let's solve this step by step.
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Identify the given values:
- Maturity value of the loan: $4,500
- Total amount of accrued interest: $350
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Understand the relationship between the principal, interest, and maturity value:
- Maturity value = Principal + Interest
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Set up the equation:
- 350
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Solve for the principal:
- Principal = 350
- Principal = $4,150
So, the principal of the loan was $4,150.
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