;g$ smart Sally investigates some other ways to obtain finance.

This table
shows the monthly repayments her bank requires on a personal loan
More than half a million drivers are booked each year in:.'l
NSW for speeding.:

The majority,of

,,:,
.

":,,:: drivers booked,,are , exceeding,,the speed,,

limk by morerthbn,,r
1

5 km/h. lVhen

yrarU'' '1 ,,,

,:,.

are driving,5oulh, across the

Sally wishes to borrow

..i

l0 000 over 3 years.

boidet.::

watch ortifoi,Nsw,,::',,
traffil.po-liCg!:,..,,'rr,:ir
i i, .'t,'.

why do the repayments with the finance company look smaller than those with the bank? 1". How much more will it cost sally to borrow the money from the finance company than from the bank? what you have to

do

Internet research activity

@u,,0

f r

.@"

Obtain a copy of the 'Getting your own wheels, worksheet, which is available on the Teacher's Resource CD. Use the weblink on the Companion website to find the answers to the questions on the worksheet.

E
Finance companies usually charge simple interest on their loans. when you borrow money with a simple interest loan, you pay the same amount of interest every year irrespective of the amount you have repaid the finance company.

A formula for simple interest

;

$qOOO from a finance company for 4 years at B% per annum (p.a.) simple interest. How much interest will he pay during the 4-year loan?

Example 2 Danielborrows

Solution 2
Formula for simple interest = P x r x
n

P=9000,r= B
100

andn=4.

SI=9000x
= 2880

8
100

x4

The simple interest is $2880. Access

to Prevocational Maths.l