Question

I borrowed $400 to buy an MP3 player. I got a two-year loan, and the lender is charging 8% simple annual interest. How much money will I have to pay back?

Answer 1

Answer:

$464

Step-by-step explanation:

Amount to be repaid = loan amount + interest on the loan

Interest on the loan = loan amount x time x interest rate

loan amount = $400

Time = 2 years

interest rate = 8%

400 x 0.08 x 2 = $64

Amount to be repaid = $400 + $64 = $464