You borrow $500 from your parents to buy a new computer. your parents charge yoa 3% simple interest and give you two years to repay the money. a) how much in interest do you pay on the loan b) what is the total amount of money that you owe your parents

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Mathematics

Snowy

16 December, 20:24

You borrow $500 from your parents to buy a new computer. your parents charge yoa 3% simple interest and give you two years to repay the money. a) how much in interest do you pay on the loan b) what is the total amount of money that you owe your parents

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Giancarlo Morales · Answer 1

A) 3% of $500 is 500*0.03=$15. This means that for one year, the interest added is $15. As we are dealing with simple interest, this amount will be added on the loan each year, and doesn't change. Therefore, over 2 years, the amount of interest you pay on the loan is 15*2=$30

b) You now need to add the extra interest to the original loan. So, 500+30=$530