1. Sandra borrowed K20 000 for 5 years at 9% p. a. flat interest to buy a new car. a) How much interest does Sandra have to pay on the loan?

b) How much does Sandra have to repay altogether?

c) What is Sandra's monthly repayment?

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a. Simple interest, S.I = K9,000

b. Total repayment = K29,000

c. Monthly repayment = K483.33

Explanation:

Given the following data;

Principal = K20,000

Interest rate = 9%

Time = 5 years

a. To find how much interest does Sandra have to pay on the loan;

Mathematically, simple interest is calculated using this formula;

Where;

Substituting into the formula, we have;

Simple interest, S.I = K9,000

b. To find how much does Sandra have to repay altogether;

Total repayment = principal + simple interest

Total repayment = 20000 + 9000

Total repayment = K29,000

c. To find Sandra's monthly repayment;

Conversion:

1 year = 12 months

5 years = 12 * 5 = 60 months

Monthly repayment = 29000/60

Monthly repayment = K483.33

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