Question

You borrow $500. The simple intrest rate is 3%. You pay off the loan after 4 years. How much do you pay for the loan

Answer 1

Given:

Principal value of loan = $500

Rate of simple interest = 3%

Time = 4 year

To find:

The total amount pay for the loan.

Solution:

Formula for simple interest is

$S.I.=\dfrac{P\times r\times t}{100}$

where, P is principal, r is rate of interest in percent and t is time in years.

$S.I.=\dfrac{500\times 3\times 4}{100}$

$S.I.=\dfrac{6000}{100}$

$S.I.=60$

So, the simple interest is $60.

Now,

$Amount=Principal+S.I.$

$Amount=500+60$

$Amount=560$

Therefore, the total amount pay for the loan is $560.