Question

You borrow $500. The simple intrest rate is 3%. You pay off the loan after 4 years. How much do you pay for the loan

Answer 1

Given:

Principal value of loan = $500

Rate of simple interest = 3%

Time = 4 year

To find:

The total amount pay for the loan.

Solution:

Formula for simple interest is

`S.I.=(P* r* t)/(100)`

where, P is principal, r is rate of interest in percent and t is time in years.

`S.I.=(500* 3* 4)/(100)`

`S.I.=(6000)/(100)`

`S.I.=60`

So, the simple interest is $60.

Now,

`Amount=Principal+S.I.`

`Amount=500+60`

`Amount=560`

Therefore, the total amount pay for the loan is $560.