Question

Gavin rides motocross in competition. A competition-level bicycle costs $1,800. He can borrow themoney from the bank at 3.596 interest for two years. By the end of the loan, how much money willGavin end up paying the bank?

Answer 1

The simple interest formula is:

`I=Prt\text{ }`

where P is the principal, r is the interest rate and t is the time.

In this case the principal is $1800, the interest rate is 0.035 (in decimal form) and t is 2. then the interest he pays is:

`I=(1800)(0.035)(2)=126`

Therefore in total he will pay $1926