Question

Marian borrowed money to buy a sound system that costs $450. She is charged 5% simple interest for one year. What is the total amount that she pays for the second system if she pays the full amount in one year?

Answer 1

5% of $450 is $22.50

Add.
450+22.50

Sum.
472.50 for one years interest.

Answer 2

$472.50

Explanation:

The simple interest is calculated with

`A=P(1+rt)`

Where
`A` represents the final amount of money,
`P` is the principal,
`r` is the interest rate in decimal number and
`t` is the time.

So, from the problem, we have
`P=450;r=0.05;t=1`

Replacing these values, we have

`A=P(1+rt)\\A=450(1+0.05(1))=472.50`

This means Marian has to pay $472.50