If the amount of interest for 274 days is $68.50, then the principal is $1,520.83
Interest can be considered as a cost of borrowing money from the lender.
There are two types of interest: simple interest and compound interest.
In simple interest method, the interest is calculated based on the amount of the principal only, while in compound interest, the interest is calculated from the principal and from the unpaid interest.
The formula for the simple interest is:
I = i x P x n
Where:
I = interest per period
P = principal
n = number of periods
In the given problem, the annual interest is 6%. Hence, interest rate per day = 6% / 365. The amount of the interest for 274 days is $68.50. Therefore,
68.50 = (6% / 365 ) x P x 274
P = 1520.83
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