Question

Margo borrows $800 agreeing to pay it back with 5% annual interest after 16 months. How much interest will she pay?

Answer 1

she will pay $640 because....

800(.05)= 40

40x16= 640

Answer 2

$53.33

Explanation:

We are asked to find the amount of interest paid by Margo.

We will use simple interest formula to solve our given problem.

`I=Prt`, where,

I = Amount of interest,

P = Principal amount,

r = Interest rate in decimal form,

t = Time in years.

Let us convert our given rate in decimal form and time in years as:

`5\%=(5)/(100)=0.05`

`16\text{ months}=(16)/(12)\text{ years}=(4)/(3)\text{ years}`

`I=\$800*0.05*(4)/(3)`

`I=(\$160)/(3)`

`I=\$53.3333\approx \$53.33`

Therefore, Margo paid $53.33 in interest.