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An amount of R85 000 is repaid in total on a loan. The loan was for a period of two years, and compound interest was charged at 9%. Calculate the amount that was borrowed.​

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SAMYRIBEIR0

Answer:

Given:

Total amount repaid (A) = R85,000

Time (t) = 2 years

Interest rate (r) = 9% or 0.09

Number of times compounded (n) = 1 (since compound interest is charged annually)

We need to solve for P:

85,000 = P(1 + 0.09/1)^(1*2)

Now, let's solve for P:

85,000 = P(1 + 0.09)^2

85,000 = P(1.09)^2

85,000 = P(1.1881)

Now divide both sides by 1.1881:

P = 85,000 / 1.1881

P ≈ R71,530.49

So, the amount borrowed was approximately R71,530.49.