Bank charges interest at 12%. Patel took $400 loan. Calculate the total amount of money Patel have to pay back to bank if he decides to pay off his loan in 5 years 

To calculate the total amount Patel has to pay back, we need to use the formula for simple interest, as no indication of compound interest is given.

The formula for simple interest is:

\[
\text{Simple Interest} = P \times r \times t
\]

Where:
- $ P $ is the principal (initial loan amount) = $400
- $ r $ is the annual interest rate = 12% = 0.12
- $ t $ is the time in years = 5 years

First, we calculate the simple interest:

\[
\text{Simple Interest} = 400 \times 0.12 \times 5 = 240
\]

Now, we find the total amount Patel has to pay back by adding the interest to the principal:

\[
\text{Total Amount} = P + \text{Simple Interest} = 400 + 240 = 640
\]

Thus, Patel has to pay back **$640** to the bank after 5 years.

Would you like further details or have any questions? Here are some related questions you might find useful:

1. How would the total amount change if the interest rate were 10% instead of 12%?
2. What if Patel pays off the loan in 3 years instead of 5?
3. How does compound interest compare to simple interest for this loan?
4. What happens if Patel decides to make partial payments each year?
5. How much would Patel save if he pays off the loan early?

**Tip:** Simple interest grows linearly with time, but compound interest grows exponentially, resulting in a higher total repayment if compounded over time.

Bank charges interest at 12%. Patel took $400 loan. Calculate the total amount of money Patel has to pay back to bank if he decides to pay off his loan in 5 years.

Calculate how much Patel must pay back on a $400 loan with a 12% interest rate over 5 years. Using the simple interest formula, this example provides a clear step-by-step solution for middle school students, ideal for Grades 6-8.

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