Question

1.4 You are very excited to go on this trip. Your mom needs to take out a loan to pay for the trip. She received a loan of R5 000 at 9% p.a. simple interest. The loan should be paid back over 4 years.

a. Using the formula A = P (1 + ixn) ,calculate the total amount paid for the loan after 4 years. (4)​

Answer 1

the total amount paid for the loan after 4 years is R6 800.

Explanation:

To calculate the total amount paid for the loan after 4 years, we can use the formula for simple interest:

A = P(1 + i * n)

where A is the total amount paid, P is the principal amount (the amount of the loan), i is the interest rate, and n is the number of years.

In this case, P = R5 000, i = 9% = 0.09 (expressed as a decimal), and n = 4.

Substituting these values into the formula, we get:

A = 5 000(1 + 0.09 * 4)

A = 5 000(1 + 0.36)

A = 5 000(1.36)

A = 6 800

Therefore, the total amount paid for the loan after 4 years is R6 800.