Question

emma takes out a loan on £1400. its gathers simple interest at a rate of 2.5% per annum. she pays back the loan after 10 years. how much money does she have to pay back?

Answer 1

Emma has to pay back £1750 after 10 years.

To calculate the total amount Emma has to pay back after 10 years with simple interest, you can use the formula:

`\[ \text{Total Amount} = \text{Principal} + \text{Simple Interest} \]`

The formula for simple interest is:

`\[ \text{Simple Interest} = \text{Principal} * \text{Rate} * \text{Time} \]`

Given:

- Principal (P) = £1400

- Rate (r) = 2.5% per annum (or 0.025 as a decimal)

- Time (t) = 10 years

Now, calculate the simple interest:

`\[ \text{Simple Interest} = 1400 * 0.025 * 10 = £350 \]`

Now, plug this into the total amount formula:

`\[ \text{Total Amount} = 1400 + 350 = £1750 \]`

Therefore, Emma has to pay back £1750 after 10 years.