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.

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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) About Me  (Show Source):
You can put this solution on YOUR website!
Recall that the simple interest formula is I=Prt 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:

I=Prt Start with the given formula.


I=12000%280.08%29%284%29 Plug in P=12000, r=0.08, and t=4


I=3840 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: 12000%2B3840=15840


So Peter paid back $15,840 total.