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Press Ctrl-APress Ctrl-A©G Dear 2010 – Not to be sold/Free to use

Fixed InterestFixed InterestStage 6 - Year 12Stage 6 - Year 12

General Mathematic

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SI = P r n

also known as Simple Interest.

Click on the letters for their meaning.

Simple

InterestPrincipal

Money

`umber ofPeriods

Rate of Interestper period

It is calculated as a percentage of money borrowed.

You must repay the principal and the interest.

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Mary borrowed $5000 for 4 years at 7% p.a.to buy some sheep.

SI = P r n= 5000 x 7

100x 4

= $1400

How much does she have to repay?

Repay = $5000+ $1400

= $6400

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A chef need $20 000 at 9% p.a for 4 years to refurbishhis restaurant. He has a 10% deposit.

i) How much was the deposit?

Deposit = 10100

x 20 000 = $2000

ii) What is the balance borrowed?

Balance = 20 000 - 2 000 = $18 000

iii) How much is the interest?

Interest = 18 000 x 9100

x 4 = $6 480

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A chef need $20 000 at 9% p.a for 4 years to refurbishhis restaurant. He has a 10% deposit.

i) How much does he repay?

Repay = 18 000Borrowed

+ 6480 Interest

= $24 480

ii) What is the monthly repayment?

Monthly Repay = 24 480Repay

÷ 4 Years

÷ 12 Months

= $510 per month

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Jane borrowed $70 000 to open her detective agency.

She repaid it at $933.33 per month for 10 years.

What was her flat interest rate?

Total Repayments = $933.33x 12 monthsx 10 years

= $ 112 000

Total Interest = $112 000- $70 000= $42 000

Annual Interest = $42 000÷ 10= $4 200

Interest % = 4 20070 000

x 100%= 6% p.a.