Emma takes out a loan of £1400.
It gathers simple interest at a rate of 2.5% per annum.
She pays back the loan after 10 years. How much money does she have to pay back? Give your answer to the nearest £1.
The formula for calculating simple interest is:
I = P * r * t
where I is the interest, P is the principal (the amount borrowed), r is the interest rate as a decimal, and t is the time in years.
Using this formula, we can calculate the interest that Emma pays over 10 years:
I = 1400 * 0.025 * 10
I = £350
So the total amount she has to pay back is the principal plus the interest:
1400 + 350 = £1750
Therefore, Emma has to pay back approximately £1750 to the nearest £1.
To calculate the amount that Emma has to pay back, we need to consider the simple interest formula:
Simple Interest = Principal x Rate x Time
Given that the principal amount is £1400, the rate is 2.5% per annum, and the time is 10 years, we can calculate the simple interest:
Simple Interest = £1400 x 2.5% x 10 years
= £1400 x 0.025 x 10
= £350
Now, let's add the simple interest to the principal amount to determine the total amount Emma has to pay back:
Total amount = Principal + Simple Interest
= £1400 + £350
= £1750
Therefore, Emma has to pay back £1750.