Nicholas borrowed $500 for 2 years at a 10% interest rate. How much interest will he pay on the loan?

Answer: He will repay $100

Step-by-step explanation: The interest payable after a given number of years is calculated by the following formula;

Interest = PRT

Where P is the initial amount invested/borrowed, R is the rate of interest payable (in percentage) and T is the time in years.

Substituting values into the formulae, we now have;

Interest = 500 x (10/100) x 2

Interest = 1000 x 0.1

Interest = 100

Therefore the interest payable is $100