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.
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.
To find the total amount required to repay the loan, we need to calculate the interest first and then add it to the borrowed amount.
The formula to calculate simple interest is:
Interest = Principal * Rate * Time
Given:
Principal (borrowed amount) = $5800
Rate (interest rate) = 7% = 0.07
Time (loan duration) = 10 months
Now, let's calculate the interest:
Interest = $5800 * 0.07 * 10
Interest = $4060
The interest on the loan is $4060.
To find the total amount required to repay the loan, we add the interest to the borrowed amount:
Total amount required to repay the loan = Principal + Interest
Total amount = $5800 + $4060
Total amount = $9860
Therefore, the total amount required to repay the loan is $9860.
To find the total amount required to repay the loan, we need to calculate the interest and add it to the principal.
First, we need to calculate the interest. The formula to calculate simple interest is:
Interest = Principal * Rate * Time
In this case, the principal is $5800, the rate is 7% (which can also be expressed as 0.07), and the time is 10 months.
Using the formula, the interest can be calculated as:
Interest = $5800 * 0.07 * 10
Next, we calculate the interest amount:
Interest = $4060
Now, to find the total amount required to repay the loan, we add the principal to the interest:
Total Amount = Principal + Interest
Total Amount = $5800 + $4060
Total Amount = $9860
Therefore, the total amount required to repay the loan is $9860.