We have been given that Anil borrows $80 000 to buy a business. The bank gives him a loan, with an interest rate of 2% each year. We are asked to find the total amount paid back by Anil to bank after 10 years.
We will use simple interest formula to solve our given problem.
[tex]A=P(1+rt)[/tex], where,
A = Final amount,
P = Principal amount,
r = Annual interest rate in decimal form,
t = Time in years.
Let us convert 2% into decimal.
[tex]2\%=\frac{2}{100}=0.02[/tex]
We have [tex]P=\$80,000[/tex] and [tex]t=10[/tex], so we will get:
[tex]A=\$80000\left(1+0.02\cdot 10\right)[/tex]
[tex]A=\$80000(1+0.2)[/tex]
[tex]A=\$80000(1.2)[/tex]
[tex]A=\$96,000[/tex]
Therefore, Anil will pay [tex]\$96,000[/tex] to the bank after 10 years.
