A farmer obtained a of #250,000 at a simple interest rate of 8% per annum to be paid in two years what would be the interest the farmer will pay on the loan...

A farmer obtained a of #250,000 at a simple interest rate of 8% per annum to be paid in two years what would be the interest the farmer will pay on the loan?

Answer Details

The farmer obtained a loan of #250,000 at a simple interest rate of 8% per annum to be paid in two years. Simple interest is calculated as a percentage of the principal amount and does not take into account the accumulated interest. The formula for calculating simple interest is: Simple Interest = (Principal x Rate x Time) / 100 Where: - Principal is the amount of the loan - Rate is the annual interest rate - Time is the duration of the loan in years In this case, the principal is #250,000, the rate is 8%, and the time is 2 years. Plugging these values into the formula, we get: Simple Interest = (250,000 x 8 x 2) / 100 Simple Interest = 40,000 Therefore, the interest that the farmer will pay on the loan is #40,000.