Question

Vince borrows $900 to buy a couch. He will pay off the loan by paying 1.5% simple interest for 2 years. Vince incorrectly calculates the amount he will pay back using the expression below. What is the correct amount Vince will pay back altogether?

Answer 1

the correct amount that Vince have to pay back altogether is $927

Explanation:

The computation of the correct amount that Vince have to pay back altogether is as follows:

As we know that

Amount = Principal + Principal × rate of interest × time

= $900 + $900 × 0.015 × 2

= $900 + $27

= $927

Hence, the correct amount that Vince have to pay back altogether is $927

We simply applied the above formula so that the correct value could come

And, the same is to be considered