Money that is borrowed from a bank, credit union, or any other financial institution is charged. Similarly, money that is deposited into an account at a bank, credit union, or any other financial institution receives an interest
The sum borrowed is called the Principal (P).
The interest is calculated as a % of the Principal and is called the Rate (R)
The extra sum paid or charged is the Interest or Simple Interest (S.I or I)
Calculate the interest (I) paid on a loan of $1300 at a rate of 2% per annum for period of 2 year (T). Calculate the amount that is to be paid.
Interest on $1300 at 2% for 2 year
I = (1300 x 2 x 2)/ 100 = 5200/100= $52
Amount to be paid = $1300 +$52 = $1352
There are 6 questions in this exercise.