If you borrow money (sometimes called a loan), usually you have to repay the amount you borrowed plus
.
One way of calculating how much interest to pay is called
interest.
For example, if a bank charges $10\%$ interest p.a. (per annum, which means "per
"), the borrower must pay $10\%$ of their loan in interest every year.
A bank charges $10\%$ p.a. simple interest.
If you borrow $\$600$ for $3$ years:
Every year, you must pay $\$$
interest.
After $3$ years, the total interest you must pay is $\$$
.
The total amount needed to repay the loan is $\$$
.
If you borrow $\$1450$ for $7$ years:
Every year, you must pay $\$$
interest.
After $7$ years, the total interest you must pay is $\$$
.
The total amount needed to repay the loan is $\$$
.
A bank charges $4.5\%$ p.a. simple interest.
If you borrow $\$600$ for $3$ years:
Every year, you must pay $\$$
interest.
After $3$ years, the total interest you must pay is $\$$
.
The total amount needed to repay the loan is $\$$
.
If you borrow $\$1450$ for $7$ years:
Every year, you must pay $\$$
interest.
After $7$ years, the total interest you must pay is $\$$
.
The total amount needed to repay the loan is $\$$
.
You can also earn simple interest on investments.
You invest $\yen 50000$ that earns $8\%$ simple interest per year.
Every year, your investment earns $\yen$
interest.
After $3$ years, the total interest earned is $\yen$
.
The total value of the investment after $3$ years is $\yen$
.
You invest $\$1000$ that earns $6\%$ simple interest per year.
The total interest earned at the end of the investment is $\$840$. For how long did you invest the money?
years.
You invest $\$1000$ that earns $6\%$ simple interest per year.
The total value of the investment when you withdraw it is $\$1540$. For how long did you invest the money?
years.