Question

John runs a florist shop in a small arkansas town and had to borrow $170,000 to start up the shop. He was able to borrow some from the state business development office at 4% but the rest he had to borrow from a friend who charged him 8%. The first year John paid $9800 in interest. How much did he borrow from his friend?

Answer 1

I = Po*r*t

I = $9800
r = 0.08
t = 1 yr.
Solve Po, the amount borrowed.