Calculate the amount of interest paid during the financial year

The loan statement provides the following information:

• Balance on 1 March 2020 (Beginning Balance) = R130 000
• Monthly repayments to Umgeni Bank = R45 500
• Balance on 28 February 2021 (Ending Balance) = R103 500

The change in the loan balance can be expressed as:

$$\text{Ending Balance} = \text{Beginning Balance} + \text{Interest Charged} - \text{Repayments}$$

To find the interest charged, we rearrange the formula:

$$\text{Interest Charged} = \text{Ending Balance} - \text{Beginning Balance} + \text{Repayments}$$

$$\text{Interest Charged} = \text{R}103\,500 - \text{R}130\,000 + \text{R}45\,500$$ $$\text{Interest Charged} = -\text{R}26\,500 + \text{R}45\,500$$ $$\text{Interest Charged} = \text{R}19\,000$$

The amount of interest paid during the financial year is $\text{R}19\,000$.