Question

If you borrow $400 for 5 years at an annual interest rate of 3%, what is the total amount of money you will pay back?

Answer 1

Answer: To calculate the total amount of money to be paid back for borrowing $400 for 5 years at an annual interest rate of 3%, we need to use the formula for simple interest:

Simple interest = Principal x Rate x Time

where:

Principal = $400 (the amount borrowed)

Rate = 3% per year

Time = 5 years

Plugging these values into the formula, we get:

Simple interest = $400 x 0.03 x 5

= $60

Therefore, the total amount of money to be paid back is the sum of the principal and the simple interest:

Total amount = Principal + Simple interest

= $400 + $60

= $460

So, you will need to pay back a total of $460 after 5 years of borrowing $400 at an annual interest rate of 3%.

Explanation:

Answer 2

Answer: $460

Explanation:

To calculate the total amount of money you will pay back after borrowing $400 for 5 years at an annual interest rate of 3%, you can use the following formula:

Total amount = principal + interest

Principal = the amount you borrowed = $400

Interest = the amount of interest paid over the 5 years period.

To calculate the interest, we can use the formula:

Interest = Principal x Rate x Time

Rate = the annual interest rate expressed as a decimal = 0.03

Time = the time period in years = 5

So, the interest for the 5-year period is:

Interest = $400 x 0.03 x 5 = $60

Therefore, the total amount of money you will pay back is:

Total amount = $400 + $60 = $460

You will pay back $460 over five years if you borrow $400 at an annual interest rate of 3%.