$2500 is borrowed from a bank that charges 10% simple interest. If the money is repaid in 5 1/2 years, how much must be paid back?
A) $3885
B) $3865
C) $3875
D) $3855

Question

Quizplus · Accepted Answer

The total amount to be paid back can be calculated using the formula for simple interest: Total = Principal + (Principal * Rate * Time). Here, Principal = $2500, Rate = 10% or 0.10, and Time = 5.5 years. So, Total = $2500 + ($2500 * 0.10 * 5.5) = $2500 + $1375 = $3875.

$2500 Is Borrowed from a Bank That Charges 10% Simple