Cambridge International Mathematics

Topics in arithmetic (Chapter 10) 215

The interest each year

=8:2%ofE12 000

=0: 082 £E12 000

=E 984

) the period=

3000

984

years

¼ 3 : 0488 years

¼ 3 years and 18 days.

EXERCISE 10C.1

1 Calculate the simple interest on a:

a $8500loan at 6 :8%simple interest p.a. for 3 years

b $17 250loan at 7 :5%simple interest p.a. for 1 year 3 months.

2 Calculate the total amount to be repaid on a loan of:

a $2250at 5 :7%p.a. simple interest for 5 years

b E 5275 at 7 :9%p.a. simple interest for 240 days.

3

a $368is charged on a$4280loan over 17 months

b $ 1152 is charged on an$11 750loan over 312 years.

4 How long will it take to earn:

a E 2500 on a loan ofE20 000at 6 :7%p.a.

b $ 4000 on a loan of$16 000at 8 :3%p.a. simple interest?

THE SIMPLE INTEREST FORMULA

InExample 5, the interest payable on a$4000loan at7%p.a. simple interest for 3 years was

$4000£ 0 : 07 £ 3 :

From this observation we construct thesimple interest formula:

I=Prn where I is thesimple interest

P is theprincipalor amount borrowed

ris therate of interest per annumas adecimal

nis thetimeordurationof the loan inyears.

Example 8 Self Tutor

Calculate the simple interest on a$6000loan at a rate of8%

p.a. over 4 years. Hence find the total amount to be repaid.

P= 6000

r=8¥100 = 0: 08

n=4

Now I=Prn

) I= 6000£ 0 : 08 £ 4

) I= $1920

The total amount to be repaid is $6000 + $1920

= $7920

simple interest

Find the rate of simple interest per annum charged on a loan if:

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Y:\HAESE\IGCSE01\IG01_10\215IGCSE01_10.CDR Tuesday, 18 November 2008 10:54:50 AM PETER