Question

To help restart the economy growth, government is offering simple interest loans to small business at a rate 1.5%.
Say,you obtain one of these loans of 90,000 for 5 years. Determine the amount of money you must repay the government after 5 years

Answer 1

The formula for calculating simple interest is:

I = P * r * t

Where:
- I = interest
- P = principal (the amount of the loan)
- r = interest rate per year
- t = time in years

Substituting the given values:

I = 90,000 * 0.015 * 5
I = 6,750

Therefore, the interest you will pay over 5 years is 6,750.

To determine the total amount to be repaid, you need to add the principal and the interest:

Total amount = principal + interest
Total amount = 90,000 + 6,750
Total amount = 96,750

So after 5 years, you will have to repay the government a total of 96,750 dollars.