A maize farmer obtains a loan of N120,000.00 at an interest rate of 9% to be repaid in one year.Calculate the interest to be paid on the loan.

Answer Details

To calculate the interest on the loan, we use the formula: Interest = Principal x Rate x Time Where Principal is the amount borrowed, Rate is the interest rate, and Time is the duration of the loan. In this case, the Principal is N120,000.00, the Rate is 9% or 0.09 in decimal form, and the Time is one year. So, Interest = N120,000.00 x 0.09 x 1 Interest = N10,800.00 Therefore, the interest to be paid on the loan is N10,800.00. Option A is the correct answer.