Question

If Jacob takes out a discounted loan with a face value of N$ 5000 for 6 months from a lender who charges a 9.5% discount rate, what is the discount, and how much money does Jacob receive?

Answer 1

Jacob receives N$ 4762.50 and the discount on the loan is N$ 237.50.

Explanation:

The discount on the loan is calculated as:

Discount = Face Value x Discount Rate x Time

where Time is in years. In this case, the time is 6/12 = 0.5 years.

Discount = N$ 5000 x 0.095 x 0.5 = N$ 237.50

The amount of money Jacob receives is:

Amount Received = Face Value - Discount = N$ 5000 - N$ 237.50 = N$ 4762.50

Therefore, Jacob receives N$ 4762.50 and the discount on the loan is N$ 237.50.