To determine how much you will pay altogether after borrowing [tex]$700 for 5 years at an annual interest rate of 7%, we need to follow these steps:
1. Calculate the total interest to be paid.
The formula for simple interest is given by:
\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}
\]
Here, the principal amount is \$[/tex]700, the annual interest rate is 7% (which is 0.07 when expressed as a decimal), and the time is 5 years.
[tex]\[
\text{Interest} = 700 \times 0.07 \times 5
\][/tex]
Upon calculating, we find that the total interest to be paid over 5 years is \[tex]$245.
2. Calculate the total amount to be paid.
The total amount to be paid consists of the original principal amount plus the interest accrued over the 5 years.
\[
\text{Total Amount} = \text{Principal} + \text{Interest}
\]
Substituting the values we have:
\[
\text{Total Amount} = 700 + 245
\]
Therefore, the total amount to be paid is \$[/tex]945.
So, if you borrow \[tex]$700 for 5 years at an annual interest rate of 7%, you will pay altogether \$[/tex]945.
