Question

if you borrow $20 for 2 years at an annual interest rate of 20%, what is the total amount of money you will pay back?

Explanation:

Step1: Calculate the interest

The simple - interest formula is $I = Prt$, where $P$ is the principal amount, $r$ is the annual interest rate, and $t$ is the time in years. Here, $P=\$20$, $r = 0.2$ (since $20\%=0.2$), and $t = 2$ years. So, $I=20\times0.2\times2$.
$I = 8$

Step2: Calculate the total amount

The total amount $A$ to be paid back is the sum of the principal $P$ and the interest $I$. So, $A=P + I$. Substituting $P = 20$ and $I = 8$, we get $A=20 + 8$.
$A = 28$

Answer:

$28$