lloyd borrowed 800 from a relative who will charge him 7% annual simple interest. if it takes lloyd 3 years to pay the money back, how much interest will he pay?
To calculate the interest, we can use the simple interest formula:
I = P x r x t
Where:
I = interest
P = principal (the amount borrowed)
r = rate (as a decimal)
t = time (in years)
We know that P = 800, r = 0.07 (7% expressed as a decimal), and t = 3. Plugging these values into the formula, we get:
I = 800 x 0.07 x 3
I = 168
Therefore, Lloyd will pay $168 in interest over the 3-year period.
Well, let's break this down, shall we? If Lloyd borrowed $800 from his relative, and the annual interest is 7%, then we just need to calculate the interest for each year and add them up.
Year 1: 7% of $800 is $56
Year 2: Another 7% of $800 is $56 (interest doesn't change over time in simple interest)
Year 3: Yet another 7% of $800 is $56 (consistency is key, right?)
So, Lloyd will end up paying a total of $56 + $56 + $56 = $168 in interest to his relative. That's like three years of paying for a fancy cup of coffee every day, but without the caffeine kick!
To calculate the simple interest, you can use the formula:
Simple Interest = Principal * Rate * Time
Where:
Principal = Amount borrowed = $800
Rate = 7% = 0.07 (in decimal form)
Time = 3 years
Let's plug in the values into the formula:
Simple Interest = $800 * 0.07 * 3
Calculating:
Simple Interest = $168
Therefore, Lloyd will pay $168 in interest over the 3 years.
To calculate the interest Lloyd will pay, we need to use the formula for simple interest:
Interest = Principal * Rate * Time
Where:
Principal = the amount borrowed = $800
Rate = the annual interest rate = 7% = 0.07 (in decimal form)
Time = the number of years = 3
Now, substitute the given values into the formula:
Interest = 800 * 0.07 * 3
Multiply: 800 * 0.07 = 56
Multiply: 56 * 3 = 168
Therefore, Lloyd will pay $168 in interest.