Find the total amount to be paid back (thatis, loan + interest
10,000 naira for 15 years at 8% simple interest per annum
To calculate the total amount to be paid back on a loan with simple interest, you can use the following formula:
Total Amount = Principal + Interest
Where:
- Principal is the initial amount of the loan (in this case, ₦10,000)
- Interest is calculated as (Principal) x (Interest Rate) x (Time in years)
Given:
Principal (P) = ₦10,000
Interest Rate (r) = 8% per annum or 0.08 when expressed as a decimal
Time (t) = 15 years
Let's calculate the Interest first:
Interest (I) = P x r x t
Interest (I) = ₦10,000 x 0.08 x 15
Interest (I) = ₦800 x 15
Interest (I) = ₦12,000
Now let's calculate the Total Amount:
Total Amount = Principal + Interest
Total Amount = ₦10,000 + ₦12,000
Total Amount = ₦22,000
Therefore, the total amount to be paid back after 15 years, including the 8% simple interest per annum on a loan of ₦10,000, is ₦22,000.