If you borrow $500 at 16% simple interest for 8 months, how much do you have to repay?
To calculate the amount to be repaid, you need to find the interest charged and add it to the principal amount borrowed.
First, calculate the interest charged using the formula:
Interest = Principal * Rate * Time
In this case, Principal = $500, Rate = 16% (in decimal form this is 0.16), and Time = 8 months. Note that the time should be in years for the formula.
Converting time from months to years: 8 months ÷ 12 = 0.67 years
Now, calculate the interest:
Interest = $500 * 0.16 * 0.67 = $53.33
Next, add the interest to the principal amount to find the total amount to be repaid:
Total amount to repay = Principal + Interest = $500 + $53.33 = $553.33
Therefore, you have to repay $553.33.