Question

Charissa borrowed $400 from her friend to buy a laptop and it took her 15 months to pay her friend back. How much did she pay her friend back if her friend charged he 5% interest annually?

Answer 1

Explanation:

We would apply the simple interest formula which is expressed as

as

I = PRT/100

Where

P represents the principal or amount borrowed.

R represents interest rate

T represents time in years

I = interest after t years

From the information given

T = 15 months. Converting to years, it becomes = 15/12 = 1.25 years

P = $400

R = 5%

Therefore

I = (400 × 5 × 1.25)/100

I = 2500/100

I = 25

The total amount that she would pay her friend back would be

400 + 25 = $425