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A bank loan has an interest rate of 6.2%. If Rashi borrows $2,500 for 3 years, how much will he pay back?

User Roee Anuar
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Final answer:

Rashi will pay back a total of $2,965 for a $2,500 loan over 3 years with a 6.2% interest rate, where $465 is the interest.

Step-by-step explanation:

To calculate how much Rashi will pay back for a loan of $2,500 with an interest rate of 6.2% over 3 years, you would use the formula for simple interest. The formula for calculating simple interest is I = PRT, where I stands for interest, P is the principal amount (the initial amount borrowed), R is the rate of interest per year, and T is the time the money is borrowed for in years.

Here, P = $2,500, R = 6.2/100 = 0.062 (since it is a percentage, it must be converted to a decimal), and T = 3 years.

So, I = $2,500 * 0.062 * 3 = $465. The total interest Rashi will pay over 3 years is $465.

The total amount Rashi will repay is the principal plus the interest, which is P + I = $2,500 + $465 = $2,965.

User Cartina
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