What is the total amount you have to pay in 2 years if you borrow P10,000.00 at a simple interest rate of 8% per year?

To calculate the total amount to be paid on a loan with simple interest, we use the formula:

\[
A = P(1 + rt)
\]

Where:
- \(A\) is the total amount to be paid,
- \(P\) is the principal (the amount borrowed),
- \(r\) is the annual interest rate (in decimal form),
- \(t\) is the time in years.

Given:
- \(P = 10,000.00\),
- \(r = 8\% = 0.08\),
- \(t = 2 \, \text{years}\).

Now substitute these values into the formula:

\[
A = 10,000(1 + 0.08 \times 2)
\]
\[
A = 10,000(1 + 0.16) = 10,000(1.16) = 11,600
\]

So, the total amount to be paid after 2 years is **P11,600.00**.

Would you like more details or have any questions?

Here are 5 related questions to explore further:
1. How do you calculate compound interest for 2 years?
2. What if the interest rate were compounded quarterly?
3. How is simple interest different from compound interest?
4. How would the total amount change if the interest rate were 5% instead of 8%?
5. What is the total interest paid in the above example?

**Tip:** Always make sure to differentiate between simple and compound interest to avoid confusion in financial calculations.

Learn how to calculate the total amount payable on a P10,000.00 loan over 2 years with an 8% simple interest rate. This problem explains key concepts in simple interest and provides a step-by-step solution. Ideal for students in Grades 7-10.

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