Toby takes out a loan of £400, which gathers interest rate of 3% per year. How much interest will he have to pay after his first year?
To calculate the interest, we need to multiply the loan amount (£400) by the interest rate (3% or 0.03):
Interest = £400 * 0.03 = £<<400*0.03=12>>12
So Toby will have to pay £12 in interest after his first year.
To calculate the amount of interest Toby will have to pay after the first year, we can use the formula:
Interest = Principal × Rate
Where:
Principal = £400 (loan amount)
Rate = 3% (interest rate per year)
Now let's calculate the interest:
Interest = £400 × 3%
Interest = £400 × (3/100)
Interest = £400 × 0.03
Interest = £12.
Therefore, Toby will have to pay £12 in interest after the first year.