Question

Nora wants to open a small business. Her grandfather will loan Nora $10,000 that she must repay in 4 years. Nora must also include an annual 2% simple interest amount when she repays her grandfather. What is the total amount Nora's grandfather will receive from Nora?

A) $10,800
B) $10,400
C) $11,000
D) $9,600

Answer 1

If Nora starts out with $10,000 and pays 2% interest (interest is used with increasing things) within 4 years we are able to see that

10,000 x 2% or 0.02 = 200

Which can then tell us that 200 x 4 (being the amount of years that pass) = 800

So even though we used our 10,000 by multiplying it was just to figure out how much interest was being gained over each year

This being $10,000 + $800 = $10,800

A) being your answer

Answer 2

The total amount Nora's grandfather will receive from Nora after 4 years, including 2% simple interest annually on a $10,000 loan, is $10,800.

Step-by-step explanation:

Nora's grandfather will receive the original loan amount plus the simple interest accumulated over 4 years. Simple interest can be calculated using the formula I = PRT, where 'I' is the interest, 'P' is the principal amount, 'R' is the rate of interest per year, and 'T' is the time in years.

Given:

Using the formula:

I = PRT

I = $10,000 * 0.02 * 4

I = $800

The total amount of interest Nora will pay is $800, and when added to the original loan amount:

Total amount to be repaid = Principal + Interest

Total amount to be repaid = $10,000 + $800 = $10,800

Therefore, Nora's grandfather will receive a total of $10,800 from Nora after 4 years.