The amusement park wants to put in two new rides that cost $1,200,000.00 and $1,360,000.00. A lender will lend them the total amount at 2.85% over 20 years. How much interest will the amusement park have to pay over the 20 years and how much will they have to actually pay back to the lender for borrowing the money?

There are two basic forms of interest - simple interest and compound interest.  

For simple interest the formula is:

I = PRT (interest equals principal, interest rate and time)

The principal is the actual amount of money you borrow or put into a savings account.