Question

If $1205 is borrowed for 11 years at an annual simple interest rate of 11.3%, what is the total

amount that must be repaid rounded to the nearest cent

Answer 1

$2,702.82

Explanation:

The formula for simple interest is

I = Prt

where

I = interest amount

P = amount invested (the principal)

r = annual rate of interest

t = time in years

11.3% = 0.113 as a decimal

Now we use the formula to find the amount of interest earned.

I = $1,205 * 0.113 * 11

I = $1,497.82

The interest amount is $1,497.82.

Now we add the earned interest to the principal amount.

$1,205 + $1,497.82 = $2,702.82