By Elimu Assistant Team 
TOPICS: Commercial
Arithmetic
LEVEL: Form 3 Level
SOURCE: Kcse 1996
Paper 1, Question 7
MARKS: 4
Skills
Tested:
- Arithmetic:
- Calculation of totals, such as total repayment and interest paid.
- Basic operations (addition, subtraction, multiplication).
- Algebra:
- Rearranging the formula for simple interest to solve for the rate.
- Understanding of variables in equations.
- Financial Mathematics:
- Application of simple interest formula.
- Understanding of loan repayment structures and interest calculations.
- Percentage Calculation:
- Converting a decimal to a percentage to express the interest rate.
QUESTION
Mr. Ngeny borrowed Kshs. 560,000 from a bank to buy a piece of land. He was required to repay the loan with simple interest for a period of 48 months. The repayment amounted to Kshs 21000 per month.
Calculate
(a) The interest paid to the bank (2 marks)
(b) The rate per annum of the simple interest (4 marks)
MARKING SCHEME
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