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Annika friend offers to loan her $2000 to help pay her college tuition. Annika plans to borrow the money for a year and par 3.5 percent in interest. How much will Annika pay back to the person that she borrows the money from if she pays it back in a year?

(1 point)
Responses

$2,035

$2,035

$2,070

$2,070

$2, 350

$2, 350

$2,700

1 answer

To calculate how much Annika will pay back after borrowing $2000 at an interest rate of 3.5% for one year, you can use the formula for simple interest:

\[ \text{Total Amount to Repay} = \text{Principal} + \text{Interest} \]

First, calculate the interest:

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

Where:

  • Principal = $2000
  • Rate = 3.5% = 0.035
  • Time = 1 year

Now, plug in the values:

\[ \text{Interest} = 2000 \times 0.035 \times 1 = 2000 \times 0.035 = 70 \]

Now, calculate the total amount to repay:

\[ \text{Total Amount to Repay} = 2000 + 70 = 2070 \]

Thus, Annika will pay back $2,070 after one year. The correct response is:

$2,070