Question

Raoul needs $200 to start a snow cone stand for this hot summer. He borrows the money from a bank that charges 4%

simple interest per year.
b. Write a formula for how much he will owe after t years

Answer 1

Answer: $200(
`1.04^(2)`)

Explanation:

The amount borrowed will be taken as the Principal, which is denoted with P , the amount he will be owing at the end of t years will be denoted with “ A” and the interest is already given as 4% which is the same as 0.04

`\\`Given: P = $200

`\\` r = 0.04

`\\` Amount = A

`\\`Time = t

`\\`Recall the formula for calculating “Amount”

`\\`A =
`P(1+r)^(t)`

`\\`Where P is the principal , A is the amount, r is the rate and t is the time

`\\`Substituting the values given into the formula , we will have

`\\`A =
`$200(1+0.04)^(t)`

`\\`A =
`$200(1.04)^(t)`

`\\`This means that after t years, Raoul will owe the bank
`$200(1.04)^(t)`