QUESTION 24 INTEREST (12 Marks) The dance company has been invited to compete in a dance competition. They need to loan R25 000,00 from a local accredited financial service provider. DBE NOV 2014 EXEMPLAR P1 & MPU P2 PREP 2019 Use information above to answer the questions that follow. 24.1 The credit provider charges an upfront payment, known as an initiation fee, of R1 140,00. The loan amount is the sum of the initiation fee and the loan value. Calculate the amount that Pantsula owes to the credit provider before the interest is added. (3) 24.2 The credit provider charges a fixed annual interest rate of 24,60%. The simple interest is calculated on the full value owed to the credit provider. Calculate the total interest to be charged on the total loan amount if it is paid over a period of four years. Use the formula: I=Pxrxt where I= interest amount P total amount credited r = interest rate t = period of loan 24.3 Mr Botha invested R20 000 on 1 December 2018 at his bank. He received a simple interest rate of 6% per year. He told his wife that they would have an extra R900 to spend. Calculate the interest Mr Botha will receive on 31 August 2019 to determine whether he was correct. (4) (5)
