The formula for calculating simple interest is:
Interest = Principal × Rate × Time
In this case, the principal (P) is $5800, the rate (R) is 7% or 0.07, and the time (T) is 10 months.
Let's calculate the interest:
Interest = $5800 × 0.07 × 10 = $4060
The total amount required to repay the loan is the sum of the principal and the interest:
Total amount = Principal + Interest = $5800 + $4060 = $9860
Therefore, Tony needs to repay a total of $9860 to settle the loan.
Tony opened a hot dog stand last April. He borrowed $5800 to pay for the stand and startup inventory, and he agreed to pay off the loan in 10 months at 7% simple interest. Find the total amount required to repay the loan.
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