Questions: To go on a summer trip, Deshaun borrows 200. He makes no payments until the end of 5 years, when he pays off the entire loan. The lender charges simple interest at an annual rate of 6%. Answer the following questions. If necessary, refer to the list of financial formulas. (a) How much total interest will Deshaun have to pay? I (b) What will the total repayment amount be (including interest)?

To go on a summer trip, Deshaun borrows 200. He makes no payments until the end of 5 years, when he pays off the entire loan. The lender charges simple interest at an annual rate of 6%.

Answer the following questions. If necessary, refer to the list of financial formulas.
(a) How much total interest will Deshaun have to pay?
I
(b) What will the total repayment amount be (including interest)?
Transcript text: To go on a summer trip, Deshaun borrows $\$ 200$. He makes no payments until the end of 5 years, when he pays off the entire loan. The lender charges simple interest at an annual rate of $6 \%$. Answer the following questions. If necessary, refer to the list of financial formulas. (a) How much total interest will Deshaun have to pay? \$IÏ (b) What will the total repayment amount be (including interest)? $\$ \square$
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Solution

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Solution Steps

Step 1: Calculate Total Interest

To calculate the total interest on the loan, we use the formula for simple interest: $I = P \times r \times t$. Substituting the given values: $I = 200 \times 0.06 \times 5 = 60$.

Step 2: Calculate Total Repayment Amount

The total repayment amount is calculated by adding the total interest to the principal: $Total = P + I$. Substituting the values: $Total = 200 + 60 = 260$.

Final Answer:

The total interest is $60$, and the total repayment amount is $260$.

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