A man got 3,600,000 loan to buy a car. He paid interest at a rate of 9% per annum.in the first year, he paid the interest on the loan. He also paid back 280,000 of the money he borrowed.

Question

a) how much did he pay in the first year altogether?
b)if he paid this amount in monthly instalments, how much did he pay each month?

Answer 1

To solve the problem, let's break it down step-by-step.

Given:

• Loan amount = 3,600,000
• Interest rate = 9% per annum
• Amount paid back = 280,000 in the first year

a) Total payment made in the first year

1. Calculate Interest for the first year: \[ \text{Interest} = \text{Loan amount} \times \frac{\text{Interest rate}}{100} \] \[ \text{Interest} = 3,600,000 \times \frac{9}{100} = 324,000 \]

2. Total payment in the first year:

   • Total Payment = Interest + Amount paid back \[ \text{Total Payment} = 324,000 + 280,000 = 604,000 \]

Answer to (a):

The man paid 604,000 in the first year altogether.

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b) Monthly payment if he paid the amount as monthly instalments

To find the monthly payment:

\[ \text{Monthly Payment} = \frac{\text{Total Payment}}{12} \] Substituting the total payment into the formula: \[ \text{Monthly Payment} = \frac{604,000}{12} = 50,333.33 \]

Answer to (b):

If he paid this amount in monthly instalments, he paid approximately 50,333.33 each month.