Tony opened a hot dog stand last April. He borrowed ​$6500 to pay for the stand and startup​ inventory, and he agreed to pay off the loan in 8 months at ​8% simple interest. Find the total amount required to repay the loan.

Answer 1

To find the total amount required to repay the loan, we need to calculate the interest on the loan and add it to the principal amount borrowed.

The formula for calculating simple interest is:

Interest = Principal × Rate × Time

Where:
Principal = $6500
Rate = 8% (written as a decimal, 0.08)
Time = 8 months

Let's calculate the interest:

Interest = $6500 × 0.08 × 8 = $4160

Now, let's calculate the total amount required to repay the loan:

Total amount = Principal + Interest
Total amount = $6500 + $4160

Total amount = $10,660

Therefore, the total amount required to repay the loan is $10,660.