Answer to Question #117586 in Finance for lim

Question #117586
Question 1

Without using finance calculator,

(a) What sum of money will become RM 15,000 in three years at a simple interest rate of 8% per annum?

(b) A certain sum of money is invested now. This investment will be worth RM5500 after fifteen months and RM5800 after twenty-four months. Find the original principal and the simple interest rate that was offered.

(c) A finance company charges a simple interest of 18% per year for short-term loans. If a loan of RM 15,000 was charged RM 337.50, how long was the term of the loan?
Expert's answer

a) If the initial investment is x, after three years it will become:

Which means that:


b) If the initial investment is x and interest rate is r, investment after fifteen and twenty four month will be equial to:

Which means that original principal is RM 5 000, offered simple interest rate is 8%.

c) If term of the loan is t years, charged interest will be:

Which means that term of the loan is:

years or 1.5 month.

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