Question

Von borrowed K10,000 from a bank with a 12% annual simple interest rate, to be repaid after 3 years

Answer 1

To calculate the total amount Von will have to repay after 3 years, we can use the formula for simple interest:

\[
I = P \times r \times t
\]

Where:
- \( I \) is the interest,
- \( P \) is the principal amount (the initial money borrowed),
- \( r \) is the annual interest rate (as a decimal),
- \( t \) is the time in years.

Given:
- \( P = 10,000 \) K,
- \( r = 12\% = 0.12 \),
- \( t = 3 \) years.

First, calculate the interest:

\[
I = 10,000 \times 0.12 \times 3 = 10,000 \times 0.36 = 3,600 \text{ K}
\]

Now, to find the total amount to be repaid (principal + interest), we add the interest to the principal:

\[
\text{Total Amount} = P + I = 10,000 + 3,600 = 13,600 \text{ K}
\]

Therefore, the total amount Von will have to repay after 3 years is **K13,600**.