Charlotte borrows $9000 over 5 years to buy a second hand car. The loan must be repaid over 5 years at 12% p.a. simple interest calculate the monthly repayment if the payments are spread equally over the 5 years.
To calculate the monthly repayment for the loan, we first need to determine the total interest paid over the 5 years.
The formula for simple interest is:
Interest = Principal × Rate × Time
In this case, the principal (P) is $9000, the rate (R) is 12% p.a., and the time (T) is 5 years.
So, the total interest paid is:
Interest = $9000 × 12% × 5 years
Interest = $5400
Now, we can calculate the total amount to be repaid:
Total Amount = Principal + Interest
Total Amount = $9000 + $5400
Total Amount = $14400
Since the loan is spread equally over the 5 years, the monthly repayment can be calculated by dividing the total amount by the number of months (60 months in this case).
Monthly Repayment = Total Amount / Number of Months
Monthly Repayment = $14400 / 60 months
Monthly Repayment = $240
Therefore, the monthly repayment for the loan is $240.
To calculate the monthly repayment for a loan with simple interest, we first need to find the total amount to be repaid.
The formula for calculating the total amount with simple interest is:
Total amount = Principal + (Principal x Interest Rate x Time)
Given:
Principal (P) = $9000
Interest Rate (R) = 12% per year
Time (T) = 5 years
Using the formula, we can substitute the given values:
Total amount = $9000 + ($9000 x 0.12 x 5)
Total amount = $9000 + ($5400)
Total amount = $14400
Now, to find the monthly repayment amount, we divide the total amount by the number of months in the loan term. Since the loan is spread equally over 5 years, there are 12 months in each year.
Total months = Number of years x Number of months in a year
Total months = 5 x 12
Total months = 60 months
Monthly repayment = Total amount / Total months
Monthly repayment = $14400 / 60
Monthly repayment = $240
Therefore, the monthly repayment for Charlotte's loan would be $240.
I = PRT
I = 9,000 * 0.12 * 5
I = 5,400
(5,400 + 9,000) / (5 * 12) = _______ per month