Alicia borrows $2800 from a bank. The bank charges 8% interest per year. If she pays off the loan in 1 year, how much does she have to pay?

Question

I don't know how to do this word problem!!!

Answer 1

i = interest

p = principal (amount borrowed)

r = rate of interest

t = time (in years)

 

i = p · r · t

i = (2800)(0.08)(1)$3,024

i = 224

 

She pays $224 in interest. She also pays back the loan or $2,800. Therefore she pays $3,024.