The formula for computing the amount of simple interest is:
I = Prt
Where P = principal amount of the loan
r = interest rate of the loan
t = duration of the loan
Substituting the amounts in the formula,
I = (150,000) (6.5%) (3)
= 29,250
To compute for the maturity value, you have to add the interest to the principal amount:
Maturity value = 150,000 + 29,250 = 179,250
The amounts of interest and maturity value of the loan are 29250 and 179250 respectively.
The simple Interest will be calculated as: = (PRT) / 100
= (150000 × 6.5 × 3) / 100
= 29250
Therefore, the maturity value will be:
= Principal + Interest
= 150000 + 29250
= 179250
The amounts of interest and maturity value of the loan are 29250 and 179250 respectively.
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