Question

You borrow $2500 to buy a new riding mower. The simple interest rate is 6%. You pay the loan off after 3 years. What is the total amount you payed for the loan?

Answer 1

$2950

Explanation:

The equation for simple interest is A = P (1 * rt) where A is the final amount, P is the principal or initial amount, r is the rate, and t is the time.

In this problem, P = $2500, the rate is 6% so r = 0.06, and t = 3. Filling in the equation, you get A = 2500 (1 + 0.06*3).

This should come out to A = $2950.