interest
QUESTION
Robert Martino plans to borrow $8,000 for five years. The loan will be repaid with a single payment after 5 years, and the interest on the loan will be computed using the simple interest method at an annual rate of 8 percent. How much will Robert have to pay in 5 years? How much will he have to pay
Principal = $8000 Simple Rate of Int = 8% pa DUration of Loan = N = 5yrs Annual Interest = 8%*8000 = $640 1. As It is Simple Interest, for 5 yrs, Total Interest = 5*640 = $3200 SO amomt payabale at end of 5 Yrs =
rincipal Interest = 8000 3200 = $11,200 2. Annual Simple Int = $640 So if Robert has to make annual Int payments, annual payment of Int = $640.
ANSWER:
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