Question

jack borrowed a sum of 12000$ from a fiancing company for3 years at 15% per anum. what is the total instrest he paid in 3 years?

Answer 1

Recall the formula for growth of a sum of money :

A = P (1 + r)^t

where

A = Value after t time periods
P = Principle (Starting value)
r = rate per time period t
t = number of time periods

For this problem,

P = 12000
r = .15
t = 3

First, we must solve for A. Then we will take A-P to determine the interest paid.

A = P ( 1 + r)^t
A = 12000 (1 + .15)^3
A = 12000 (1.15)^3
A = $18,250.50

Thus, the amount after 3 years is $18,250.50. Since the initial amount borrowed was $12,000, Jack has accrued 

A - P = 18250.50 - 12000 = $6250.50

in interest. 

Answer 2

Formula= cost price x rate of interest x time (years) and then divide by 100