Question

Cory borrows $1,200 from the bank for riding lawn mower. The interest rate Is 8% per year. How much simple interest will he pay is he takes 2 years to repay the loan?

Answer 1

$1,392

Explanation:

1,200(0.08)(2) = 192

1,200 + 192 = $1,392

Answer 2

Cory will pay
`\$192` as simple interest in 2 years.

Solution:

Given, the amount (P) Cory borrows is
`\$1200`

The rate of interest R =
`8\%`

Time to repay (T) = 2 years

`\bold{Simple \ Interest = (principle \ amount* time* rate \ of \ interest)/(100)}`

On substituting the values in the formula we get,

`\rightarrow ((1200*2*8))/(100)`

`\rightarrow (19200)/(100) = 192`

Therefore, the simple interest is
`\$192`