Simple Interest The simple interest formula is I = Prt (Interest = Principal * r

Question

Simple Interest

The simple interest formula is I = Prt (Interest = Principal * rate * time). This is one way that interest is calculated on a loan or investment.

Create a loan scenario: Tell a story about the purpose of the loan, who was involved, and explain the terms and conditions of the loan. Present your scenario to the class; make sure it includes values for three of the four variables for the simple interest formula. Do not solve the problem, but let your classmates complete the solution.

This is my second time posting this question. Please dont give copy the student loan answer from another post.

Explanation / Answer

Marshall wants to purchase a car. The price of the car is $3000. He will deposite $1000 in cash but he needs $2000 as loan. He approches and then bank manager told that the bank will provide loan of $2000 with 10% interest for five years. Find the interest charged by bank and how much total payment to be given to the bank?

Sol:- Here, given p=$2000, r=10%,, t=10 years

To find 'I' and A (amount)

We know that, I = p.r.t

I= 2000 x 10/100 x 10= $ 2000

Therefore, after 10 years Marshall would have to pay $2000 as total interest.

A= P+I = $(2000+2000) = $4000.

THANK YOU

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