Tom has been saving up for a new bike for months, and he finally has enough money to buy one. He has found a bike that he likes, but it costs $500. He wants to pay with a combination of cash and a loan from his bank. If he pays $250 in cash and takes out a loan for the remaining $250, how much will he need to pay in interest over the course of 2 years if the loan has an annual interest rate of 10%? Assume that the interest is compounded annually.
The loan amount is $250, and the annual interest rate is 10%, so the interest on the loan for the first year will be 250 * 10% = $<<250*10*.01=25>>25.
Therefore, the total amount Tom will need to pay after one year is $250 + $25 = $<<250+25=275>>275.
The interest on the remaining loan amount for the second year will be 250 * 10% = $<<250*10*.01=25>>25.
Therefore, the total amount Tom will need to pay after two years is $275 + $25 = $<<275+25=300>>300 in interest. Answer: \boxed{300}.