Answer:
She will pay $7,500 interest over the 5 years
She will have to pay back $17,500 in total
Step-by-step explanation:
Let us revise the rule of the simple interest
<em>I</em> = <em>Prt</em> and <em>A</em> = <em>P</em>(1 +<em> rt</em>) , where:
- A = Total Accrued Amount (principal + interest)
- P = Principal Amount
- I = Interest Amount
- r = Rate of Interest per year in decimal
- t = Time Period involved in months or years
∵ Leah borrows £10,000 over 5 years at a simple interest rate of 15%.
∴ P = 10,000
∴ t = 5
∴ r = 15% = = 0.15
→ Substitute them in the first rule to find the interest
∵ I = 10,000(0.15)(5)
∴ I = 7,500
∴ She will pay $7,500 interest over the 5 years
→ Let us find A
∵ A = 10,000(1 + 0.15×5)
∴ A = 17,500
∴ She will have to pay back $17,500 in total