Question

Here's the result of this question

Anil borrows $80 000 to buy a business.
The bank gives him a loan, with an interest rate of 2% each year.
It takes Anil 10 years to pay the bank back - how much does he pay back in total?

Answer 1

We have been given that Anil borrows $80 000 to buy a business. The bank gives him a loan, with an interest rate of 2% each year. We are asked to find the total amount paid back by Anil to bank after 10 years.

We will use simple interest formula to solve our given problem.

`A=P(1+rt)`, where,

A = Final amount,

P = Principal amount,

r = Annual interest rate in decimal form,

t = Time in years.

Let us convert 2% into decimal.

`2\%=(2)/(100)=0.02`

We have
`P=\$80,000` and
`t=10`, so we will get:

`A=\$80000\left(1+0.02\cdot 10\right)`

`A=\$80000(1+0.2)`

`A=\$80000(1.2)`

`A=\$96,000`

Therefore, Anil will pay
`\$96,000` to the bank after 10 years.