Question

Toby takes out a loan of £400, which gathers interest rate of 3% per year. How much interest will he have to pay after his first year?

Answer 1

To calculate the interest, we need to multiply the loan amount (£400) by the interest rate (3% or 0.03):

Interest = £400 * 0.03 = £<<400*0.03=12>>12

So Toby will have to pay £12 in interest after his first year.