Example
You have borrowed $100 with 5% interest. You owe the bank: In total, you have to pay back $$100 \left( 1 + 0.05 \right) = 100 + 5 = \$105$$
You have borrowed $100 with 5% interest. You owe the bank: In total, you have to pay back $$100 \left( 1 + 0.05 \right) = 100 + 5 = \$105$$