SOLUTION: Peter borrowed $12,000, which he paid back after 4 years at a simple interest rate of 8%. Find the total amount that Peter paid back.

Question 219513: Peter borrowed $12,000, which he paid back after 4 years at a simple interest rate of 8%. Find the total amount that Peter paid back.
Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!
Recall that the simple interest formula is where 'I' is the interest, P is the balance/principal, 'r' is the interest rate, and 't' is the time in years.

So let's first find out how much interest he paid:

Start with the given formula.

Plug in , , and

Multiply

So he paid $3,840 in interest alone.

Now just add this to the amount he borrowed (since he has to pay that back too) to get:

So Peter paid back $15,840 total.
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