Commercial bank gave a loan of TZS 5,000,000 at an annual interest rate of 12%. Calculate the interest payable after one year.

May 27, 2026Economics

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Answer

\text{TZS 600,000}

Step-by-step solution

3 steps

Identify the given values.
The principal amount (P) is TZS 5,000,000.
The annual interest rate (R) is 12%, which is 0.12 in decimal form.
The time period (T) is 1 year.
Use the simple interest formula.
The formula for simple interest is:
$I = P \times R \times T$
where $I$ is the interest, $P$ is the principal, $R$ is the annual interest rate, and $T$ is the time in years.
Substitute the values and calculate the interest.
$I = 5,000,000 \times 0.12 \times 1$ $I = 600,000$
The interest payable after one year is TZS 600,000.

The interest payable after one year is $\text{TZS 600,000}$ .

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