Question

If Patricia asks Katie and Pete to repay the loan ($30, 000) as an annual equal amount at the end of each year over the 10-year period based on the annual rate of interest calculated from a(i), how much would the annual repayment be? What is the total cash repayment for the loan over the period? How much interest would they have paid on the loan

Answer 1

The annual repayment would be $3,000. The total cash repayment would be $30,000. They would not have paid any interest on the loan.

Step-by-step explanation:

To calculate the annual repayment amount, we can divide the total loan amount ($30,000) by the number of years (10). So, the annual repayment would be $3,000.

To calculate the total cash repayment for the loan over the period, we can multiply the annual repayment amount ($3,000) by the number of years (10). The total cash repayment would be $30,000.

To calculate the interest paid on the loan, we can subtract the original loan amount ($30,000) from the total cash repayment ($30,000 - $30,000 = $0). So, they would not have paid any interest on the loan.