Sally buys a living room set (sofa, chair and coffee table) for $3380 including sales tax. The store offers her a buy now pay later deal. If she does not pay by the end of three years she will be charged a simple interest at an annual rate of 4%. (a) How much interest would she have to pay at the end of the 3 years?

To calculate the simple interest Sally would have to pay at the end of 3 years, we can use the formula for **simple interest**:

\[
I = P \times r \times t
\]

Where:
- $ I $ is the interest,
- $ P $ is the principal (the initial amount),
- $ r $ is the annual interest rate (expressed as a decimal),
- $ t $ is the time in years.

### Step 1: Identify the known values
- $ P = 3380 $ (the price of the living room set),
- $ r = 4\% = 0.04 $ (the interest rate),
- $ t = 3 $ years.

### Step 2: Calculate the interest
Now, we substitute the values into the formula:

\[
I = 3380 \times 0.04 \times 3 = 406.56
\]

So, the interest Sally would have to pay at the end of 3 years is **$406.56**.

Would you like further clarification or have any other questions?

### Related Questions:
1. What would the interest be if the annual interest rate was 5% instead of 4%?
2. How much interest would Sally pay if she only took 2 years to repay the amount?
3. How is the simple interest formula different from compound

Learn how to calculate simple interest for a $3380 living room set at an annual rate of 4% over 3 years. This step-by-step guide uses the simple interest formula I = P × r × t, suitable for students in Grades 6-8.

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