Question

How much interest will you have to pay your creditor on a loan? ₵8,000,000 for 10 and a half years, if the agreed rate is 8.5% per year and the interest is paid at the maturity of the transaction?

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1. Identify the principal amount \( P \):

P = 8,000,000

2. Identify the rate of interest \( r \):

r = 8.5\% = 0.085

3. Identify the time period \( t \) in years:

t = 10.5

4. Use the simple interest formula:

I = P \times r \times t

5. Substitute the values into the formula:

I = 8,000,000 \times 0.085 \times 10.5

6. Calculate the interest \( I \):

I = 7,140,000

The amount of interest to be paid isI = 7,140,000 .

2. Identify the rate of interest \( r \):

3. Identify the time period \( t \) in years:

4. Use the simple interest formula:

5. Substitute the values into the formula:

6. Calculate the interest \( I \):

The amount of interest to be paid is

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