Question

Robert gets a loan from his bank.

He agrees to borrow £6000 at a fixed annual simple interest rate of 7%.
He also agrees to pay the loan back over a 10 year period.

How much money in total would he have paid back in 10 years?

Answer 1

£10,200

Explanation:

Simple interest = principal × rate × time

Principal = £6000

Rate = 7% = 0.07

Time = 10 years

Simple interest = principal × rate × time

= £6000 × 0.07 × 10

= £4,200

Total = simple interest + principal

= £4,200 + £6,000

= £10,200

He would have to pay back a total of £10,200 in 10 years