Abusiswe loans R78 500 from a bank to buy a car. She agrees to repay the amount with interest in equal monthly instalments. The bank adds simple interest at a rate of \( 7.5 \% \) over 3 years to the amount. Calculate the following: 4.1 the total amount Abusiswe has to pay 4.2 the monthly instalments she has to pay

To calculate the total amount Abusiswe has to pay, we first need to find the interest charged on the loan. The formula for simple interest is: \[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \] Plugging in the values: - Principal = R78,500 - Rate = 7.5% (or 0.075) - Time = 3 years \[ \text{Interest} = R78,500 \times 0.075 \times 3 = R17,662.50 \] Now, we can find the total amount: \[ \text{Total Amount} = \text{Principal} + \text{Interest} = R78,500 + R17,662.50 = R96,162.50 \] For the monthly instalments, we divide the total amount by the number of months in 3 years (which is 36 months): \[ \text{Monthly Instalment} = \frac{\text{Total Amount}}{\text{Number of Months}} = \frac{R96,162.50}{36} \approx R2,671.19 \] 4.1 The total amount Abusiswe has to pay is R96,162.50. 4.2 The monthly instalments she has to pay are approximately R2,671.19.