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WAEC Mathematics 2021 Theory — Question 1

Question 1 of 22 from the West African Examinations Council (WAEC) Mathematics 2021 Theory paper, with the correct answer and a full explanation.

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1(a). Mr Sarfo borrowed $25,000.00 from AFIAK Financial Services at 21% simple interest per annum for 3 years. He was able to pay back the loan in 2 years at equal yearly instalments. How much did he pay each year?

Model answer

Interest = P×R×T/100 = (25,000×21×3)/100 = $15,750. Total amount to repay = P+I = 25,000+15,750 = $40,750. Paid over 2 years in equal instalments: 40,750 ÷ 2 = $20,375 per year.

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