Question

If you borrow $12,000 for 30 months at 6.5% simple interest, what is the total amount you will have to repay?

Answer 1

use the formula

I = P*r*t

to find out how much interest I you'll have to pay back.

P = 12000 is the principal
r = 0.065 is the interest rate as a decimal
t = 30/12 is the time in years

notice how I did not simply write t = 30. The t = 30 represents 30 years and not 30 months, so that's why I divided by 12.

Answer 2

Once you calculate the value of I, you add that to P to get P+I

that is the total amount you pay back

Answer 3

Or you could do it all in one formula

A = P + P*r*t

either way works