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METHODS OF CALCULATING INTEREST 1.A woman borrowed $2,000 and agreed to repay it at the end...

METHODS OF CALCULATING INTEREST

1.A woman borrowed $2,000 and agreed to repay it at the end of 3 years together with 10% simple interest per year. How much will she pay 3 years hence?

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Answer #1

Principal (P) = $2,000

Rate of interest (r) = 0.10

Number of years (t) = 3

Simple interest = P × r × t

                        = 2,000 × 0.10 × 3

                        = $600

At the end of 3 years, the woman should pay the aggregate of principal and interest.

Payment = Principal + Simple interest

               = 2,000 + 600

               = $2,600 (Answer)

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