A man takes a loan of * 50,000 from a bank and pays it back after 3 years. The
bank charges simple interest at the rate of 12.5% per annum. Calculate:
(i) the interest charged by the bank.
(ii) the amount of money the man has to pay to the bank to clear the loan
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Answer:
The total interest charged by the bank is 18,750 and the amount of money the man has to pay to the bank to clear the loan is 68,750.
Step-by-step explanation:
Principle(P) = 50,000
Time(T) = 3 years
Rate(R) = 12.5%
Simple Interest(SI) = ?
We know that,
Interest = P*T*R / 100
= 50,000*3*12.5 / 100
= 1,875,000 / 100
= 18,750
Now
Total Amount = Principle + Interest
= 50,000 + 18,750
= 68,750
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