Question

A college student borrows $1,000 to go to school. Their interest rate is 8% for the simple interest loan. The loan is paid back in 3 years. How much will they have paid in interest?

Answer 1

The student has to pay back $1240

Further explanation:

Simple interest is calculated on the principal amount. It can be applied only one or over a period of time. For example, if the interest is to be applied annually then it will be calculated each year on the starting principal amount.

Given

Amount = Principal amount = P_0 = $1000

Interest rate = r = 8%

time = t = 3 years

The formula for calculating interest is:

$I=P_0rt\\= 1000*0.08*3\\=240$

The interest for three years will be $240.

The amount to be paid back by the student is:

$A=P_0+I\\=1000+240\\=1240$

The student has to pay back $1240

Keywords: Simple interest, yearly interest

Learn more about simple interest at:

• brainly.com/question/1577690
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