Eric's car loan statement said he would pay
$6,718.02 in interest for a 5 year loan at 8.3%
. How much did Eric borrow to buy the car?

We can calculate how much Eric borrowed to buy the car by using the formula for simple interest:

\[
I = P \times r \times t
\]

Where:
- $ I $ is the interest paid ($6,718.02),
- $ P $ is the principal (the amount borrowed),
- $ r $ is the annual interest rate (8.3% or 0.083),
- $ t $ is the time in years (5 years).

Rearranging the formula to solve for $ P $:

\[
P = \frac{I}{r \times t}
\]

Now, substituting the given values:

\[
P = \frac{6,718.02}{0.083 \times 5}
\]

Let’s calculate it:

\[
P = \frac{6,718.02}{0.415}
\]

\[
P \approx 16,190.64
\]

So, Eric borrowed approximately **$16,190.64** to buy the car.

Would you like more details or have any further questions?

Here are 5 related questions:
1. What is the formula for compound interest?
2. How does the interest rate affect the total interest paid over time?
3. What would the interest be if Eric had a 7-year loan instead of 5 years?
4. How would the principal change if the interest rate was reduced to 6%?
5. Can monthly payments be calculated using the same formula for interest?

**Tip**: Always check whether the interest is simple or compounded when calculating loans or investments.

Eric's car loan statement said he would pay $6,718.02 in interest for a 5 year loan at 8.3%. How much did Eric borrow to buy the car?

Learn how to calculate the principal amount Eric borrowed for his car loan using the simple interest formula. Given a 5-year loan at 8.3% interest, this problem helps you understand key financial concepts, including how to solve for principal when interest is provided. Suitable for students in Grades 9-11.

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