The principal balance of the loan comes out to be $140,571 when the yearly interest on the loan is $9,840 and the rate of interest of 7%.
What is a loan?
The loan is an amount taken by the borrower from the lending party and promised to pay the loan with interest after an agreed period of time.
Given values:
Annual interest on a loan: $9,840
Interest rate: 7%
Time period: 1 year
Computation of principal value on loan:
[tex]\rm\ Principal \rm\ Value =\frac{\rm\ Annual \rm\ Interest \rm\ on \rm\ Loan}{\rm\ Interest \rm\ Rate \times \rm\ Time \rm\ Period}\\\rm\ Principal \rm\ Value=\frac{\$9,840}{0.07 \times 1 \rm\ year }\\\rm\ Principal \rm\ Value=\$140,571[/tex]
Therefore, when the annual interest is $9,840 at the rate of interest of 7%, then the value of the principal amount is $140,571.
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