(a)A loan of 12 000 was borrowed from a bank at 14% per annum
Calculate
(i) The interest on the loan at the end of the first year
(ii) The total amount owing at the end of the first year
A repayment of $ 7 800 was made at the start of the second year.
Calculate
(iii) the amount still outstanding at the start of the second year
(iv) the interest on the outstanding amount at the end of the second year
I'll do the first two.
(i)
12,000 * 0.14 = 1,680
(ii)
12,000 + 1,680 = 13,680
I'll be glad to check your answers for the other two.
82320
(iii) 13,680 - 7,800 = 5,880 still outstanding in the second year.
I am not sure how to work out the last one.
(iv)
5,880 * 0,14 =
823.2
PxRxT
12000x14/100x1
= 1,680
ii) A= P + I
12000 + 1680
= 13680
¡) 14/100×12000=$1680
¡¡) 12000+1680=13,680
¡¡¡) 13,680-7800=5880
iv) let 100% represent the payment that was made plus the14% interest
100+14=114%
114/100×5800=$6703.2 interest on the end of the second year.
🤗
To calculate the interest and total amount owing at the end of the first year, you can use the simple interest formula:
(i) The interest on the loan at the end of the first year:
Interest = Principal * Rate
Interest = $12,000 * 14% = $1,680
(ii) The total amount owing at the end of the first year:
Total amount owing = Principal + Interest
Total amount owing = $12,000 + $1,680 = $13,680
Now, let's move on to the second year:
To calculate the amount outstanding at the start of the second year, subtract the repayment made at the start of the second year from the total amount owing at the end of the first year:
(iii) The amount still outstanding at the start of the second year:
Outstanding amount = Total amount owing - Repayment
Outstanding amount = $13,680 - $7,800 = $5,880
To calculate the interest on the outstanding amount at the end of the second year, multiply the outstanding amount by the interest rate:
(iv) The interest on the outstanding amount at the end of the second year:
Interest = Outstanding Amount * Rate
Interest = $5,880 * 14% = $823.20
Therefore, the answers are:
(i) The interest on the loan at the end of the first year is $1,680.
(ii) The total amount owing at the end of the first year is $13,680.
(iii) The amount still outstanding at the start of the second year is $5,880.
(iv) The interest on the outstanding amount at the end of the second year is $823.20.