Question

Nigel borrows $250 and pays 5.5% simple interest each year. if he pays back the money in one year, what is the total amount that he pay?

Answer 1

To solve this problem we will use the formula: Total Amount = Present Amount(1+interest)^n
where
Present amount =$250
interest= 5.5%
n= 1 year
Total amount = $250(1+0.055)^1
Total amount = $263.75
The total amount that Nigel will pay if pays back the money in one year is $263.75.