CREDIT

Loans$$$ ….Repay with Interest

+

Borrow $2000

Repay $100 per month for 2 years

How Much do you Pay??

$2000 Borrowed $2400 Repaid

$100 x 24

Interest Paid = $400

Simple Interest & Flat Rate Loans

Use the Formula I = PRN

Amount of Simple Interest

The Principal $$

Borrowed

The Interest Rate

per annum (year)

The Number of

Years to PayBack

How Much Interest ?…you Borrow $2000 (P)

…Interest Rate 10% pa (R)

…Repay in 2 Years (N)

Use the Formula : I = PRN

Substitute the Values : I = 2000 x 0.10 x 2

Calculate: I = $400

*How Much Would You Have to Repay?

Borrowed + Interest=$2400

*What Would be the Monthly Repayments?

Total$ to pay / 24=$2400/24 mths=$100 per month

Using I = PRN to find the Interest Rate

Cash Price = $400

OR

On Terms: $40 Deposit& $20 per month for 2 years

How Much Do I Pay??

How Much Interest??

What % Rate Is That??

PAY $40 + $20 x 24 mths = $520

Interest Paid = Extra over the Cash Price = $120

Use I = PRN

120 = 360 x R x 2

R=0.167

R=16.7%

Balance =$400-$40=$360