r a lender makes a simple loan of S900 for 5 years and charges 5%, then the amou
ID: 1133801 • Letter: R
Question
r a lender makes a simple loan of S900 for 5 years and charges 5%, then the amount that the lender receive at maturity is S Round your response to the nearest two decimal place) r a lender makes a simple loan of S2500 or one year and charges S70 interest, then the simple interest rate on that loan is % R d yourms se to the nearest whole number) If a borrower must repay $106.50 one year from today in order to receive a simple loan of $100 today, the simple interest on this loan is OA, 6.5% B. C. OD, 60% 5.0% 65%Explanation / Answer
A.
Simple interest rate = Principle * rate of interest * time
= 900 * 0.05* 5
= 225
So at the time of maturity he will receive 900+ 225 = $1125
B.
Simple interest rate = Principle * rate of interest * time
70 = 2500 * r * 1
r = 70/ 2500
= 0.028 or 2.8%
Interest on the loan is 2.8% per annum
C.
Interest = 106.5 – 100 = 6.5
Simple interest rate = Principle * rate of interest * time
6.5 = 100* r* 1
r = 6.5/100
= 6.5%
Correct answer is A
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