2. Loans$$$ ….Repay with Interest
+
Borrow $2000
Repay $100 per month for 2 years $100 x 24
How Much do you Pay??
$2000 Borrowed $2400 Repaid
Interest Paid = $400
3. Simple Interest & Flat Rate Loans
Use the Formula I = PRN
Amount of
The Interest Rate
Simple Interest
per annum (year)
The Principal $$ The Number of
Borrowed Years to PayBack
4. How Much Interest ?…you Borrow $2000 (P)
…Interest Rate 10% pa (R)
…Repay in 2 Years (N)
Use the Formula : I=
PRN
Substitute the Values : I = 2000 x 0.10 x 2
Calculate: I = $400 Borrowed + Interest
=$2400
*How Much Would You Have to Repay?
Total$ to pay / 24
*What Would be the Monthly Repayments? =$2400/24 mths
=$100 per month
5. Using I = PRN to find the Interest Rate
Cash Price = $400
OR
On Terms: $40 Deposit
& $20 per month for 2 years
How Much Do I Pay?? PAY $40 + $20 x 24 mths = $520
How Much Interest?? Interest Paid = Extra over the Cash Price = $120
Use I = PRN
What % Rate Is That?? 120 = 360 x R x 2 R=16.7%
Balance =$400-$40=$360 R=0.167
