Question

Mr. Maxwell White bought a house at the cost of GHȼ250,000,000.00. He paid 20% of the cost out of his own resources an took a loan for the remaining amount at 2 1/2 % simple interest per annum. Calculate the total amount Mr. Maxwell White paid for the house, if he paid the loan 8 years later.

Answer 1

Answer:GHȼ290,000,000

Explanation:

Given the following :

Cost of house = 250,000,000

Amount paid out of his own resources = 20% of house cost

Amount loaned = 250,000,000 - (20% of 250,000,000)

Rate = 2 1/2% = 5/2% = 0.025

Period or time = 8 years

Therefore,

Amount paid out of his own resources :

0.2 × 250,000,000 = 50,000,000

Amount loaned = (250,000,000 - 50,000,000) = 200,000,000 = principal

Simple Interest on loan = (principal × rate × time)

200,000,000 × 0.025 × 8 = 40,000,000

Total amount paid back= (200,000,000 + 40,000,000) = 240,000,000

Total amount paid for the house :

Total loan paid + amount paid from own resource:

240,000,000 + 50,000,000 = 290,000,000