General Mathematic Fixed Interest Stage 6 — Year

General Mathematic Fixed Interest Stage 6 - Year 12 Press Ctrl-A ©G Dear 2010 – Not to be sold/Free to use 1

also known as Simple Interest SI = P r n `umber of Periods Principal for ate ofmeaning. R their Interest Click on the letters Money period It is calculated as a percentage of money borrowed. You must repay the principal and the interest. 2

Mary borrowed $5000 for 4 years at 7% p. a. to buy some sheep. SI = P r n = 5000 x 7 x 4 100 = $1400 How much does she have to repay? Repay = $5000 + $1400 = $6400 3

A chef need $20 000 at 9% p. a for 4 years to refurbish his restaurant. He has a 10% deposit. i) How much was the deposit? Deposit = 10 x 20 000 = $2000 100 ii) What is the balance borrowed? Balance = 20 000 - 2 000 = $18 000 iii) How much is the interest? Interest = 18 000 x 9 x 4 = $6 480 100 4

A chef need $20 000 at 9% p. a for 4 years to refurbish his restaurant. He has a 10% deposit. i) How much does he repay? Repay = 18 000 + 6480 = $24 480 Borrowed Interest ii) What is the monthly repayment? Monthly Repay = 24 480 ÷ 4 ÷ 12 Repay Years Months = $510 per month 5

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. 33 x 12 monthsx 10 years = $ 112 000 Total Interest = $112 000 - $70 000 = $42 000 Annual Interest = $42 000 ÷ 10 = $4 200 Interest % = 4 200 x 100% = 6% p. a. 70 000 6