Simple Interest-10th grade-5

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Mr. Timberlake took loan of $40,000 at 10% simple interest per annum from a
Bank. After 2 years he paid $20,000 to the bank. How much will he have to
pay if he clears the loan after 2 years more?

Solution: Interest on $40,000 at 10% fro 2 years = $(10 * 2 * 400) = $8000

Now, he paid $20,000 to the bank.

Out of this amount the bank takes $8000 as interest and deducts the remaining
$(20,000 – 8,000) = $12,000 from the original loan of 440,000.

So, the loan stands as $(40,000 – 12,000) = $28,000

The interest on $28,000 for 2 years at 10% = $(10 * 2 * 280) = $5,600

After 2 years he will have to pay $28,000 and the interest $5,600

Hence Mr. Timberlake have to pay $(28,000 + 5,600) = $33,600 to clear his loan.