Question

A simple interest loan of $6000 has an annual interest rate of 4.4% determine the value of P=$6000R=0.044T=10/12Find the amount of interest paid on this loanCalculate the maturity value of this loan

Answer 1

Explanations:

The formula for calculating the simple interest is expressed as:

`I=\text{PRT}`

where:

• P is the, principal, = $6,000

,

• R is the ,rate, = 0.044

,

• Time T = 10/12 years

Substitute the given parameters into the formula

`\begin{gathered} I=6,000*0.044*(10)/(12) \\ I=(2640)/(12) \\ I=\$220 \end{gathered}`

Hence the amount of interest paid on this loan is $220

Maturity value = Principal + Interest

Maturity value = $6000 + $220

Maturity value = $6,220

Hence the maturity value of this loan is 6,220