Question

I borrowed $25,000 for 5 years at a 5% interest. What was the total interest?

A. $6,250
B. $12,500
C. $5,500
D. $5,450

Answer 1

A. 6,250

Explanation:

Adding 5% is the same as multiplying a number by 1.05.

So...

25,000 x 1.05 = 26,250

then

26,250 x 1.05 = 27562.50

then

27562.50 x 1.05 = 28940.625

then

28940.625 x 1.05 = 30387.65625

then finally:

30387.65625 x 1.05 = 31907.0390625

Now to find the total intrest, subtract 25000 from 31907.0390625

Which is: 6907.0390625

And because you are talking about money, it must be rounded to the nearest 100ths place.

So the final amount is 6907.04

In this case, the closest answer would be

A. 6,250

Answer 2

$6250

Explanation:

Hope the picture will help you.....