Suppose you loan $320 to a friend and charge them 11% annual interest. If they don't pay you back, how much will they owe you after five years? Round your answer to the nearest hundredth (2 places after the decimal).

Step-by-step explanation:

You want to calculate the interest on $320 at 11% interest per year after 5 year(s).

The formula we'll use for this is the simple interest formula, or:

Where:

   P is the principal amount, $320.00.

   r is the interest rate, 11% per year, or in decimal form, 11/100=0.11.

   t is the time involved, 5year(s) time periods.

   So, t is 5year time periods.

To find the simple interest, we multiply 320 × 0.11 × 5 to get that:

The interest is: $176.00

Usually now, the interest is added onto the principal to figure some new amount after 5 year(s),

or 320.00 + 176.00 = 496.00. For example:

   If you borrowed the $320.00, you would now owe $496.00

   If you loaned someone $320.00, you would now be due $496.00