Question

A bank loans a customer $100,000 for a period of 2 years. The simple interest rate of the loan is 5.7%. What is the total amount that the customer will need to pay the bank over the 2 years?

Answer 1

$111400

Explanation:

First, converting R percent to r a decimal

r = R/100 = 5.7%/100 = 0.057 per year,

then, solving our equation

I = 100000 × 0.057 × 2 = 11400

I = $ 11,400.00

The simple interest accumulated

on a principal of $ 100,000.00

at a rate of 5.7% per year

for 2 years is $ 11,400.00.