Subjects finance

Simple Interest 6C36C9

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1. **State the problem:** Leo takes out a loan of 2200 with simple interest at a rate of 2.5% per annum and repays it after 10 years. We need to find the total amount he has to pay back. 2. **Formula for simple interest:** $$\text{Simple Interest} = P \times r \times t$$ where $P$ is the principal amount, $r$ is the annual interest rate (in decimal), and $t$ is the time in years. 3. **Calculate the interest:** Given $P = 2200$, $r = 2.5\% = 0.025$, and $t = 10$ years, $$\text{Interest} = 2200 \times 0.025 \times 10$$ $$= 2200 \times 0.25$$ $$= 550$$ 4. **Calculate total amount to pay back:** $$\text{Total} = P + \text{Interest} = 2200 + 550 = 2750$$ **Final answer:** Leo has to pay back **2750** after 10 years.