Question 712414: Jerry borrowed $600 at 10 percent per year, simple interest, for three years. H ow much did he have to repay (principle+ interest) at the end of the three-year period? my solution :$600.00 amount borrowed at 10 percent year,$600.00 divided 10 percent =60.00 per year times 3 years =$180.00, 600+180 =780.00 repaided with (principal+interest) my answer just does't look right, can you help me?
Answer by nerdybill(7384)   (Show Source):
You can put this solution on YOUR website! Jerry borrowed $600 at 10 percent per year, simple interest, for three years. H ow much did he have to repay (principle+ interest) at the end of the three-year period? my solution :$600.00 amount borrowed at 10 percent year,$600.00 divided 10 percent =60.00 per year times 3 years =$180.00, 600+180 =780.00 repaided with (principal+interest) my answer just does't look right, can you help me?
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Your answer didn't account for the interest being added to the amount owed each year.
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There is a formula for this:
A = P(1+r)^t
where
A is amount after time t (what we're looking for)
P is principal or amt you started with (600)
r is the rate (.10)
t is time in years (3)
.
A = P(1+r)^t
A = 600(1+.10)^3
A = 600(1.10)^3
A = 600(1.331)
A = $796.60
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