Question

Lora borrowed $4,500 for some home repairs. She will be paying 6% in simple interest over the next three years. What is the total amount she will be paying on the loan

Answer 1

$5,310

Explanation:

We are going to use the simple interest formula for this problem:

`A = P (1 + rt)`

P = initial balance

r = annual interest rate

t = time

First, change 6% into the decimal form:

6% ->
`(6)/(100)` -> 0.06

Next, plug in the values:

`A=4,500(1+0.06(3)`

`A=5,310`

Lora will own $5,310 after 3 years.