Question

With simple interest, the amount added is a percentage of the original

value.
Ellie takes out a loan of £600, which gathers simple interest at a rate of
4% per year.
a) How much interest is added to the account each year?
If she has the loan for 8 years,
b) how much interest will the loan have gathered?
c) how much will she have to pay back in total?

Answer 1

a) How much interest is added to the account each year?

(600*4)/100 = 24£

If she has the loan for 8 years,

b) how much interest will the loan have gathered?

1,04^8*600=821£

interest : 221£

c) how much will she have to pay back in total?

600+221= 821£

Explanation: