Question

What is the total amount to be repaid if $6,000 is borrowed for 12 months with an annual interest rate of 6%?

Answer 1

To find the total amount to be repaid when $6,000 is borrowed for 12 months with an annual interest rate of 6%, we can use the formula for simple interest:

\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}
\]

Where:
- Principal (P) = $6,000
- Rate (R) = 6% = 0.06 (as a decimal)
- Time (T) = 12 months = 1 year

Now, plugging in the values:

\[
\text{Interest} = 6000 \times 0.06 \times 1
\]

Calculating the interest:

\[
\text{Interest} = 6000 \times 0.06 = 360
\]

Now, we add the interest to the principal to find the total amount to be repaid:

\[
\text{Total Amount} = \text{Principal} + \text{Interest} = 6000 + 360 = 6360
\]

Thus, the total amount to be repaid is **$6,360**.