Question

Marcy is planning to borrow 12,500 with a simple interest rate of 5.2% for 4 years. How much will she pay back to the bank?

Answer 1

Answer: 15100

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Step-by-step explanation:

The simple interest formula is
i = P*r*t
where
i = interest
P = is the amount borrowed
r = interest rate in decimal form
t = time in years

In this case,
i = unknown
P = 12500
r = 0.052 (equivalent to 5.2%)
t = 4

So,
i = P*r*t
i = 12500*0.052*4
i = 2600
Which means $2,600 in simple interest is charged on the amount borrowed. You have to pay this amount on top of the $12,500 borrowed.

In total, you have to pay back P+i = 12500+2600 = 15100 which is the final answer