Simple Interest Problems Solution for Set 3 Question 10
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Solution to Question 10
So there are two parts to this question. One part is to work out how much interest Jalen will have to pay over the 12 months. The second thing you're going to have to do is calculate how much money in total Jalen will end up paying back. Let's calculate the interest first. For this we'll need to call on the formula for calculating simple interest:
simple interest paid = (principal * interest rate * term length) / 100
The amount initially loaned is the principal, so that's $1000. The interest rate is 3% per year. Remember that since we're dealing with an interest rate PER YEAR, we have to do everything else in terms of years. So that means writing the term length in years. In the question, it says the term length is 12 months. This term length must be converted into years. It's 1.0 years. So our term length is 1.0 years:
simple interest paid = ($1000 * 3 * 1.0) / 100
simple interest paid = $30.00
So now for the second part of the question, which is working out the total amount Jalen will have to pay back. We know that Jalen has to pay back the actual amount he borrowed (the principal), as well as the interest:
total amount = simple interest + principal
total amount = $30.00 + $1000
total amount = $1030.00.
In total, Jalen will end up paying back $1030.00 to the Centier Bank.