Here, the loan formula has been solved for principal.
The local bank can arrange for us to have a 10 year loan at 6 per cent interest and we know we can afford to pay $1,300.00 per month for the loan.

How much money will we be able to borrow?

1) The rate would be 6 ÷ 1,200 = .005

2) The months would be 12 × 10 = 120.

3) We can pay $1,300.00 month.

4) So the principal would be: