If you take out a $1,000 loan for college at 7% interest, what is the principal?

Solution:

It is given that

Amount taken as loan = $1,000

Rate of interest = 7%

We know that the principal amount is the amount which is borrowed excluding the interest.

Therefore, the principal is $1,000.

Example:

If you take out a $5,000 loan for college at 8% interest, what is the principal?

Solution:

It is given that

Amount taken as loan = $5,000

Rate of interest = 8%

We know that the principal amount is the amount which is borrowed excluding the interest.

Therefore, the principal is $5,000.

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If you take out a $1,000 loan for college at 7% interest, what is the principal?

Summary:

If you take out a $1,000 loan for college at 7% interest, the principal is $1,000.