Simple Interest Formula

Pedro plans to borrow $1,200 from the bank to buy a car, with a plan to repay it in three years. The bank charges 10% simple interest. The video explains how to calculate the interest using the formula I = p * r * t, where I is the interest, p is the principal, r is the interest rate, and t is the time in years. By applying the formula, Pedro's interest is calculated to be $360. Therefore, the total amount Pedro will owe the bank is $1,560, which includes the principal and the interest. The lesson concludes with a recap of how to use the simple interest formula.

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