A college student borrows $1,000 to go to school. Their interest rate is 8% for the simple interest loan. The loan is paid back in 3 years. How much will they have paid in interest?
Accepted Solution
A:
The student has to pay back $1240Further explanation:Simple interest is calculated on the principal amount. It can be applied only one or over a period of time. For example, if the interest is to be applied annually then it will be calculated each year on the starting principal amount.GivenAmount = Principal amount = P_0 = $1000Interest rate = r = 8%time = t = 3 yearsThe formula for calculating interest is:[tex]I=P_0rt\\= 1000*0.08*3\\=240[/tex]The interest for three years will be $240.The amount to be paid back by the student is:[tex]A=P_0+I\\=1000+240\\=1240[/tex]The student has to pay back $1240Keywords: Simple interest, yearly interestLearn more about simple interest at:brainly.com/question/1577690brainly.com/question/1578028#LearnwithBrainly