Question

James borrows $300 at an interest rate of 8% and takes 5 years to pay it off.

How much does he pay?

Answer 1

If you're dealing with SIMPLE interest, this problem is an easy one.

The SIMPLE interest is found using the formula i = p r t
where p is the principal amount, r is the interest rate as a decimal fraction, and t is the time in years.

Then interest = i = $300(0.08)(5 years) = $120

Answer 2

he pays $420
0.08*5=120
300+120= $420