Caleb bought a $795 necklace for his wife's birthday. If he bought it on credit with an interest rate of 16.25%, how much total will he have paid after three years?

Answer: The total amount that he would have paid after 3 years is

$1183

Step-by-step explanation:

We would apply the formula for determining simple interest which is

expressed as

I = PRT/100

Where

I represents interest paid on the amount owed.

P represents the principal or initial amount owed.

R represents interest rate

T represents the duration for which the amount was owed in years.

From the information given,

P = $795

R = 16.25

T = 3 years

Therefore,

I = (795 * 16.25 * 3) / 100

I = $388

The total amount that he would have paid after 3 years is

795 + 388 = $1183