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.

1 answer

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.