The formula for calculating simple interest is:
Future Value = Principal + (Principal x Rate x Time)
Given:
Principal (P) = R 1 200
Rate (R) = 15% = 0.15
Time (T) = 4 years
Future Value = 1 200 + (1 200 x 0.15 x 4)
Future Value = 1 200 + 720
Future Value = 1 920
Therefore, the future value of the loan is R 1 920.
Mr. Pan borrows R 1 200 for a term of 4 years from Mr. Gullible, with interest at 15 % per annum simple. Find the future value of the loan.
R 1 920
R 750
R 1 200
R 8 400
R 9 840
1 answer
1 answer