Question

Sarah borrows $5575 on a 2 year loan at 3% simple interest. What will be the total amount Sarah has to pay back at the end of year 2?

Answer 1

$5909.50

Explanation:

First, converting R percent to r a decimal

r = R/100 = 3%/100 = 0.03 per year,

then, solving our equation

I = 5575 × 0.03 × 2 = 334.5

I = $ 334.50

The simple interest accumulated

on a principal of $ 5,575.00

at a rate of 3% per year

for 2 years is $ 334.50.