Answer:
a. Simple interest, S.I = K9,000
b. Total repayment = K29,000
c. Monthly repayment = K483.33
Explanation:
Given the following data;
Principal = K20,000
Interest rate = 9%
Time = 5 years
a. To find how much interest does Sandra have to pay on the loan;
Mathematically, simple interest is calculated using this formula;
[tex] S.I = \frac {PRT}{100} [/tex]
Where;
- S.I is simple interest.
- P is the principal.
- R is the interest rate.
- T is the time.
Substituting into the formula, we have;
[tex] S.I = \frac {20000*9*5}{100} [/tex]
[tex] S.I = \frac {900000}{100} [/tex]
Simple interest, S.I = K9,000
b. To find how much does Sandra have to repay altogether;
Total repayment = principal + simple interest
Total repayment = 20000 + 9000
Total repayment = K29,000
c. To find Sandra's monthly repayment;
Conversion:
1 year = 12 months
5 years = 12 * 5 = 60 months
Monthly repayment = 29000/60
Monthly repayment = K483.33
