Mr. Smart heard about the Ghana Govt’s ‘Smart Borrowing’ concept and borrowed GH¢15,000 to have a successful wedding and pledged his wife & future uncertain children as collateral security. He wants to pay off the loan in 12 monthly instalments otherwise the bank will come for his wife & children born to them since they were pledged as collateral for the loan. What should the monthly repayments be if the annual interest rate is 18%?

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ajinems ajinems · Answer 1 · 2022-05-30T13:41:22+02:00

The monthly repayments would be = GH1,475

The amount borrowed by Mr. Smart = GH¢15,000

The period of payment = 12 months = 1 year

The annual interest rate is = 18%

Therefore the simple interest= P×T×R/100

SI = 15000× 1×18/100

SI= 270000/100

SI= GH2,700

The total amount he will pay back and the interest is 15,000 + 2,700 = 17,700

Therefore the monthly repayments would be = 17,700/12

= GH1,475

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