Simple Interest

$50,000 borrowed from a bank for a simple interest of 8% p.a. for three years. What is the amount of interest to be paid on loan at the end of three year ?

Expert Solution

Here,

Principal Amount = $50,000

Rate of interest = 8%

Number of years = 3

Terms used in the formula

SI - Simple Interest

R - Rate of interest

T - Number of years

$ \begin{align}SI &= P \times R \times T\\ &= \$50,000 \times 0.08 \times \ 3\\ &= \$12,000 \end{align} $

Hence, the simple interest generated over these three years is $12,000

Interest paid on loan is $12,000

Vinay answered 3 years ago

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Simple Interest

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