The question in the image asks:

Maria wants to start a small "sari-sari" store in her barangay. She needs a capital of PHP 15,000 to buy initial stocks of goods. She decides to borrow this amount from a local cooperative that offers a simple interest loan with an annual interest rate of 6%.

If Maria plans to pay back the loan in 2 and a half years, how much will she pay in total at the end of the loan period?

To solve this, we use the simple interest formula:

$I = P \times r \times t$

Where:

• $I$ = Interest
• $P$ = Principal (PHP 15,000)
• $r$ = Annual interest rate (6% or 0.06)
• $t$ = Time in years (2.5 years)

Step 1: Calculate the interest.

$I = 15000 \times 0.06 \times 2.5$

$I = 15000 \times 0.15 = 2250$

The total interest Maria will pay is PHP 2,250.

Step 2: Calculate the total amount to be paid.

Total amount $A = P + I$:

$A = 15000 + 2250 = 17250$

So, Maria will pay PHP 17,250 at the end of the loan period.

Do you want more details on the calculation or have any other questions?

Here are 5 related questions you can explore:

1. What if Maria took a loan for 3 years instead?
2. How would the payment change if the interest rate was 8%?
3. What if Maria could only afford to pay PHP 16,000 in total? What interest rate would be required?
4. How is compound interest different from simple interest in this scenario?
5. What if Maria borrowed an additional PHP 5,000 after one year? How much would she pay in total?

Tip: Simple interest is calculated only on the principal amount, making it easier to compute compared to compound interest.