1. Mr. Thimbrel borrowed $5,600 from the bank at 8.5% per annum simple interest for 6 years. Calculate:
a) The sum of money paid in interest to the bank.
b) The total amount of money repaid to the bank.
c) The value of each monthly installment
(a) i = Prt = 5600 * 0.085 * 6
(b) 5600 + (a)
(c) (b)/72
96.00
a) Well, Mr. Thimbrel's interest payments are no laughing matter! To calculate the sum of money paid in interest, we can use the formula: Interest = Principal x Rate x Time. So, for Mr. Thimbrel, the interest would be: $5,600 x 0.085 x 6. Don't worry, I'll do the math for you... That comes out to a whopping $2,856!
b) Now, let's move on to the total amount of money repaid to the bank. This includes both the principal (the original amount borrowed) and the interest. Mr. Thimbrel will need to repay $5,600 (principal) + $2,856 (interest) for a grand total of $8,456. That's a pretty hefty sum!
c) Ah, the monthly installment! To find this, we divide the total amount repaid by the number of months in the loan period. Since Mr. Thimbrel borrowed the money for 6 years (which is 72 months), we divide $8,456 by 72. The monthly installment comes out to be approximately $117.44.
In summary:
a) The sum of money paid in interest is $2,856.
b) The total amount of money repaid to the bank is $8,456.
c) The monthly installment is approximately $117.44.
Remember, though, numbers can be serious, so make sure you double-check my calculations!
To calculate the sum of money paid in interest to the bank, we can use the formula:
Interest = Principal * Rate * Time
Where:
Principal = $5,600
Rate = 8.5% per annum = 0.085
Time = 6 years
a) Sum of money paid in interest = Principal * Rate * Time
= $5,600 * 0.085 * 6
= $2,142
So, the sum of money paid in interest to the bank is $2,142.
To calculate the total amount of money repaid to the bank, we need to add the principal amount to the interest paid.
b) Total amount repaid = Principal + Sum of money paid in interest
= $5,600 + $2,142
= $7,742
So, the total amount repaid to the bank is $7,742.
To calculate the value of each monthly installment, we need to divide the total amount repaid by the number of months in 6 years (which is 72 months since there are 12 months in a year).
c) Value of each monthly installment = Total amount repaid / Number of months in 6 years
= $7,742 / 72
= $107.53 (rounded to two decimal places)
So, the value of each monthly installment is approximately $107.53.
To calculate the sum of money paid in interest to the bank, we need to use the formula for simple interest:
Interest = Principal * Rate * Time,
where Principal is the amount borrowed, Rate is the interest rate per annum, and Time is the duration of the loan in years.
a) Sum of money paid in interest to the bank:
In this case, the principal is $5,600, the interest rate is 8.5% (or 0.085 as a decimal), and the time is 6 years.
Interest = $5,600 * 0.085 * 6 = $2,142.
Therefore, the sum of money paid in interest to the bank is $2,142.
To calculate the total amount repaid to the bank, we need to add the interest to the principal:
b) Total amount of money repaid to the bank:
Total amount = Principal + Interest
= $5,600 + $2,142
= $7,742.
Therefore, the total amount of money repaid to the bank is $7,742.
To find the value of each monthly installment, we need to divide the total amount by the number of months the loan is for.
c) Value of each monthly installment:
Since the loan is for 6 years, we need to convert this to months (6 years * 12 months/year = 72 months).
Value of each monthly installment = Total amount / Number of months
= $7,742 / 72
≈ $107.53 (rounded to two decimal places)
Therefore, the value of each monthly installment is approximately $107.53.