Under an add-on plan, the total amount to be paid back can be calculated using the formula:
Total amount to be paid back = Loan amount + (Loan amount x Interest rate x Number of years)
In this case, the loan amount is $2,000, the interest rate is 12.5% or 0.125, and the loan duration is six months or 0.5 years.
Total amount to be paid back = $2,000 + ($2,000 x 0.125 x 0.5)
Total amount to be paid back = $2,000 + $125
Total amount to be paid back = $2,125
Therefore, Ted had to pay back $2,125 under the add-on plan.
Ted borrowed $2,000 for six months at 12.5%. How much did he have to
pay back under an add-on plan?
1 answer
1 answer