Calculate the total amount (loan and interest)to be paid on a loan of N1 000.00, borrowed for 2 years at a simple interest rate of 10%
p.a.
Your answers???
I = PRT
I = 1,000 * 0.1 * 2
I = ?
To calculate the total amount to be paid on a loan with interest, we'll need to use the formula for simple interest:
Total Amount = Principal + Interest
Where:
Principal = Amount borrowed (N1 000.00)
Interest = Principal * Rate * Time
Now let's calculate the interest:
Rate = 10% p.a. (per annum)
Time = 2 years
Interest = Principal * Rate * Time
Interest = N1 000.00 * 0.10 * 2
Interest = N100.00
Now that we have the interest, we can calculate the total amount:
Total Amount = Principal + Interest
Total Amount = N1 000.00 + N100.00
Total Amount = N1 100.00
Therefore, the total amount to be paid on the loan of N1 000.00, borrowed for 2 years at a simple interest rate of 10% p.a. is N1,100.00.