Question

Vince borrows $900 to buy a couch. He will pay off the loan by paying 1.5% simple interest for 2 years. Vince Incorrectly calculates the amount he will pay back using the expression below. 900+900(1.015 times 2).

Answer 1

Vince will pay back $927 to fully repay the loan.

Step-by-step explanation:

The given question involves calculating simple interest. Simple interest is calculated using the formula I = PRT, where I is the interest, P is the principal (initial amount borrowed), R is the interest rate, and T is the time in years.

In this case, Vince borrows $900 at an interest rate of 1.5% for 2 years. To calculate the amount he will pay back, we need to use the formula: I = PRT. Plugging in the values, we have:

I = 900 * 0.015 * 2 = 27

So, Vince will pay back $927 (900 + 27) to fully repay the loan.