Question

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​

Answer 1

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