219k views
3 votes
A debt of 4000 L.E is due in 6 months. If the interest rate is 10%,

what is the value of the debt if it is paid 4 months hence..

User Jai Pandya
by
7.7k points

1 Answer

0 votes

Final answer:

To determine the value of the debt of 4000 L.E due in 6 months when paid 4 months hence with a 10% interest rate, simple interest is calculated for 4 months. The interest amounts to 133.32 L.E, and when added to the principal, the debt value is 4133.32 L.E.

Step-by-step explanation:

The student asked how to calculate the value of a debt of 4000 L.E due in 6 months if it is paid 4 months hence, given an interest rate of 10%. To calculate the value, we will use simple interest formula:

I = PRT

Where I is the interest, P is the principal amount (4000 L.E), R is the rate of interest per time period (10% or 0.10), and T is the time period in years. In this case, since the debt is to be paid in 4 months (which is 4/12 years or 1/3 years), we plug in the values:

I = 4000 * 0.10 * (1/3)

I = 4000 * 0.10 * 0.3333

I = 133.32 L.E

Now, we add the interest to the principal amount to find the value of the debt when paid 4 months hence:

Value = P + I

Value = 4000 + 133.32

Value = 4133.32 L.E

Hence, the value of the debt if paid 4 months hence is 4133.32 L.E.

User TemaTre
by
7.4k points