A loan of 12,000 was borrowed from a bank at 14% per annum.
Calculate the interest of the loan at the end of the first year.
And the total amount owing at the end of the first year.
A repayment was made of 7,800 at the start of the second year.
Calculate the amount still outstanding at the start of the second year.
And the interest of the outstanding amount at the end of the second year.
With which of these questions do you need help?
this is one question with different parts I need help with all
To calculate the interest of the loan at the end of the first year, you'll need to use the formula:
Interest = Principal x Rate x Time
In this case, the principal (loan amount) is $12,000, the rate is 14% (or 0.14 as a decimal), and the time is 1 year.
So, the interest at the end of the first year is:
Interest = $12,000 x 0.14 x 1
Interest = $1,680
Next, to calculate the total amount owing at the end of the first year, you just need to add the interest to the principal:
Total amount owing = Principal + Interest
Total amount owing = $12,000 + $1,680
Total amount owing = $13,680
Now, moving on to the second year, we need to calculate the amount still outstanding at the start of the year after a repayment of $7,800 was made.
Amount still outstanding = Total amount owing - Repayment
Amount still outstanding = $13,680 - $7,800
Amount still outstanding = $5,880
Finally, to calculate the interest of the outstanding amount at the end of the second year, you can use the same formula:
Interest = Principal x Rate x Time
In this case, the principal (outstanding amount) is $5,880, the rate is still 14% (or 0.14 as a decimal), and the time is 1 year.
So, the interest at the end of the second year is:
Interest = $5,880 x 0.14 x 1
Interest = $823.20