Question

Jerry borrowed $600 at 10 percent per year, simple interest, for three years. How much did he have to repay (principal + interest) at the end of the three-year period?
A. $625
B. $780
C. $805
D. $902

Answer 1

a

Answer 2

are you sure?

Answer 3

yes

Answer 4

$600 at 10% pa (per annum = per year) means at the end of the first year it's:

$600 + $600*(10%) = $660

Then since this is SIMPLE interest you do NOT add interest on the interest, so you add the same amount to the balance as before:
$660 + $600(10%) = $720

Then finally at the end of the third year you have $780 on the balance, which is the total amount you need to pay off.

Just to clarify the answer is B, not A.