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Math

QuestionHow much will you pay in total if you borrow \$2,400 for 4 years at a 6% annual interest rate?

Studdy Solution

STEP 1

Assumptions1. The borrowed amount is $,400. The interest rate is6% per annum3. The time for repayment is4 years4. The interest is calculated as a one-time payment, not yearly compounding5. The total amount to be paid includes both the principal amount and the interest

STEP 2

First, we need to find the interest amount on the borrowed sum. We can do this by multiplying the borrowed amount by the interest rate and the time in years.
Interest=Borrowed amounttimesInterest ratetimesTimeInterest = Borrowed\, amount \\times Interest\, rate \\times Time

STEP 3

Now, plug in the given values for the borrowed amount, interest rate, and time to calculate the interest.
Interest=$2,400times6%timesInterest = \$2,400 \\times6\% \\times

STEP 4

Convert the percentage to a decimal value.
6%=0.066\% =0.06Interest=$2,400times0.06times4Interest = \$2,400 \\times0.06 \\times4

STEP 5

Calculate the interest amount.
Interest=$2,400times0.06times4=$576Interest = \$2,400 \\times0.06 \\times4 = \$576

STEP 6

Now that we have the interest amount, we can find the total amount you have to pay back. This includes both the borrowed amount and the interest.
Total amount=Borrowed amount+InterestTotal\, amount = Borrowed\, amount + Interest

STEP 7

Plug in the values for the borrowed amount and the interest to calculate the total amount.
Total amount=$2,400+$576Total\, amount = \$2,400 + \$576

STEP 8

Calculate the total amount you have to pay back.
Total amount=$2,400+$576=$2,976Total\, amount = \$2,400 + \$576 = \$2,976You will pay $2,976 altogether.

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