Final answer:
To find the total repayment of a $400 loan over 15 years with an annual interest rate of 2%, you will pay $520, which includes the principal and the interest accrued over the period.
Step-by-step explanation:
Calculating Total Repayment on a Loan
If you borrow $400 for 15 years at an annual interest rate of 2%, to calculate the total amount you will pay altogether, we need to use the formula for simple interest:
Total amount paid = Principal amount (1 + (interest rate * number of years))
Where:
- Principal amount = $400
- Interest rate = 2% or 0.02 (as a decimal)
- Number of years = 15
Let's calculate:
Total amount paid = $400 * (1 + (0.02 * 15))
Total amount paid = $400 * (1.3)
Total amount paid = $520
So, if you borrow $400 at an annual interest rate of 2% for 15 years, you will pay a total of $520.