Question

Kim takes out a loan of $250 at 12% interest per year. She repays the loan after 1 year. How much does she repay?

Answer 1

$280

Explanation:

When you take out a loan, you repay it (called the Principal) and the percentage fee the bank charges for loaning you the money (called the Interest).

Kim borrowed $250. That's the principal of the loan and will be paid when she repays the loan.

She's paying 12% per year interest. She's repaying the loan after 1 year, and so we can find this by:

`$250xx12%=$30`

And so she repays:

`$250` - principal
`ul($color(white)(0)30` - interest
`ul(ul($280`