Jay Jenkins takes out a 12.5​% simple interest loan today that will be repaid 9 months from now with a payoff amount of ​$5000.00. What amount is Jay​ borrowing?

Answer 1

Let X be the amount Jay is borrowing.
The interest on the loan is X * 0.125 * (9/12) = X * 0.09375.
So Jay is borrowing X + X * 0.09375 = $5000.
Thus (1 + 0.09375) * X = $5000.
Thus (1.09375) * X = $5000.
Thus X = $5000 / 1.09375 = $4568.97 rounded to $$4569. Answer: \boxed{4569}.