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18 January, 20:41

Dan borrowed $1,250.00 from his brother who is charging him 5% simple interest. If Dan pays his brother back in 18 months, how much does he have to pay back including the interest?

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  1. 18 January, 21:18
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    Given that Dan borrowed $1,250.00 from his brother who is charging him 5% simple interest. Now we have to find the total payment that he needs to payback including interest. Hence we can use simple interest formula

    I=PRT

    Where P = 1250

    R=5% = 0.05

    T=18 months = 18/12 = 1.5 years

    Now plug these values into above formula

    I=PRT=1250*0.05*1.5=93.75

    So total payment including interest = 1250+93.75=1343.75

    Hence final answer is $1343.75.
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