Question

What are the amount of interest and the maturity value of a loan for 154,000 pesos at 6.5% Simple interest for 24 months?

Answer 1

Step 1:

In this question, we are given the following:

What is the amount of interest and the maturity value of a loan for 154,000 pesos at 6.5% Simple interest for 24 months?​

Step 2:

From the question, we have that:

`\begin{gathered} \text{Principal = 154, 000 peso} \\ \text{Rate = 6.5 \%} \\ \text{Time = 24 months = 2 years} \end{gathered}`

Step 3:

`\begin{gathered} \text{Simple Interest =}\frac{Principal\text{ X Rate X Time}}{100} \\ \text{Simple Interest =}\frac{154,000\text{ x 6. 5 x 2}}{100} \\ \text{Simple Interest =}(2,002,000)/(100) \\ \text{Simple Interest = 20,020 pesos} \end{gathered}`

Step 4:

The maturity value of the loan =

`\begin{gathered} Pr\in\text{cipal + Simplest Interest} \\ \\ =\text{ 154,000 + 20,020} \\ =\text{ 174,020 pesos} \end{gathered}`