The owner of a clothing store borrows $6,870 for 1 year at 11.5% interest. If he pays the loan back at the end of the year, how much does he pay back?

1 Answer
Jul 2, 2018

Answer:

#color(crimson)("Amount paid back by the owner after 1 year " = $ 7,660.05#

Explanation:

#"Interest " = (P * N * R) / 100#

#"Given : Principal " P = $6,870, " Period " N = 1 year, "Rate of Interest " R = 11.5#

#I = (6870 * 1 * 11.5) / 100 = 68.7 * 11.5 = $ 790.05#

#"Amount " A = "Principal " P + "Interest " I#

#:. A = P + I = 6,870 + 790.05 = $ 7,660.05#