Question

You loan your brother $300 and charge him 2% simple annual interest. He promises to

repay you one year later. How much willyour brother have to pay you?
in 1 year
Also plz show the steps

Answer 1

Answer: 306 dollars

===========================================

Work Shown:

i = P*r*t ..... simple interest formula

i = 300*0.02*1

i = 6

Your brother pays $6 in simple interest on top of the $300 in principal loaned to him. The total amount he pays back is 300+6 = 306 dollars.

----------

Another way to calculate the answer is to do these steps

A = P*(1+r*t)

A = 300*(1+0.02*1)

A = 300*(1.02)

A = 306

The 1.02 represents a 2% increase when going from 300 to 306.

Answer 2

$306

Explanation:

In one year, the 2% annual interest would have been applied once. Therefore, your brother would pay you 1.02 * 300 which is 306.

Hope this helps :)