If you borrow $6.65 for 6 years at an interest rate of 10%, how much interest will you pay?

If $6.65 is borrowed for 6 years at 10% rate of interest, the simple interest to be paid is $3.99, and the compound interest to be paid for the same amount is $5.13.

Expert Answers

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An amount of $6.65 is borrowed for 6 years at an interest rate of 10%.

It is not mentioned if we need to determine simple interest or compound interest.

If simple interest has to be determined for an amount X borrowed for n years at the rate of interest r, the interest is given by

`I = X*r*n`

Here, X = $6.65, r = 10%, and n = 6.

The simple interest for 6 years is SI = 6*0.1*6.65 = 3.99.

If compound interest has to be determined for an amount X borrowed for n years at the rate of interest r, the interest is given by

`CI = X*(1 + r)^n - X`

Here, X = $6.65, r = 10%, and n = 6.

The compound interest for 6 years is CI = 6.65*(1+0.1)^6 - 6.65 = $5.13.

The simple interest to be paid for the amount borrowed is $3.99, and the compound interest to be paid for the same amount is $5.13.

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