The school district needs to build a new high school. It will cost $1,800,000.00 to build the school. The lender will give them the money at 2.5% over 30 years. How much interest will the school district have to pay over the thirty 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.