Fred borrows $40 at 0.8% simple interest per month. When Fred pays the loan back 2 years later, how much interest does
40x0.08x24=76.8
nope. Read the question carefully.
.08 = 8%
Fred's rate is 0.8%
To calculate the interest, we need to use the formula for simple interest:
Interest (I) = Principal (P) x Rate (R) x Time (T)
Given:
Principal (P) = $40
Rate (R) = 0.8% per month (convert to decimal by dividing by 100)
Time (T) = 2 years
First, let's convert the time from years to months:
Time (T) = 2 years x 12 months/year = 24 months
Now, we can calculate the interest:
Interest (I) = $40 x 0.008 x 24
= $76.8
Therefore, the amount of interest Fred has to pay back is $76.8.
To calculate the interest Fred will pay on the loan, you can use the formula for simple interest:
Simple Interest = Principal (borrowed amount) x Interest Rate x Time
Given that Fred borrowed $40 and the interest rate is 0.8% per month, you can plug these values into the formula:
Interest = $40 x 0.008 (0.8% in decimal form) x 24 (number of months)
Now, let's calculate this:
Interest = $40 x 0.008 x 24
= $0.32 x 24
= $7.68
Therefore, Fred will pay $7.68 in interest when he pays back the loan after 2 years.