To calculate the interest charged on a debtor's account that is overdue by 4 months at an annual interest rate of 12%, we can use the formula for simple interest:
\[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \]
Where:
- Principal = the outstanding balance (R2276)
- Rate = the annual interest rate (12% or 0.12)
- Time = the period the account has been overdue, expressed in years. Since the account is overdue by 4 months, this can be converted to years:
\[ \text{Time} = \frac{4 \text{ months}}{12 \text{ months/year}} = \frac{1}{3} \text{ years} \approx 0.3333 \text{ years} \]
Step 1: Plug the values into the formula
\[ \text{Interest} = 2276 \times 0.12 \times \frac{1}{3} \]
Step 2: Calculate the interest
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Calculate \(0.12 \times \frac{1}{3}\): \[ 0.12 \times \frac{1}{3} = 0.12 \times 0.3333 \approx 0.04 \]
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Calculate the interest: \[ \text{Interest} = 2276 \times 0.04 \] \[ \text{Interest} = 91.04 \]
Final Step: Conclusion
The interest charged on the debtor's account that is overdue by 4 months at an annual interest rate of 12% is approximately R91.04.
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