An employee loans $800 from the labor union and promised to pay the amount in 1 year .How much will he need to pay after 1 year if the interest rate is 15%?
$900
$720
$920
$290
Explanation:
Principal amount is $800.
Rate of interest is 15%.
Time to pay the principal with the interest is 1 year.
Using the formula for solving the future amount;
Future Amount = Principal x [1 + (Rate x Time)]
Future Amount = $800 x [1 + (15% x 1)]
Future Amount = $800 x [1 + (0.15 x 1)]
Future Amount = $800 x (1 + 0.15)
Future Amount = $800 x 1.15
Future Amount = $920
Therefore, the employee must pay $920 in 1 year
.