The interest is $110 and the amount paid to the bank is $610.
What is simple interest?
Simple interest is calculated just on the loan's principal amount, whereas compound interest is calculated on both the principal and the cumulative interest.
It is given that you decide to borrow $500 to go on a trip to whatever land. You go to the bank and borrow the money at 11% for 2 years.
A. The simple interest is,
SI = ( Principle x rate x time ) / 100
SI = ( 500 x 11 x 2 ) / 100
SI = $110
B. The amount paid to the bank after 2 years is,
Amount = P + SI
Amount = $500 + $110 = $610
Therefore, the interest is $110 and the amount paid to the bank is $610.
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