3. A motorcycle costs R25 250 cash. You do not have this amount so you decide to borrow the full amount from your parents at \( 10 \% \) interest per year. a) How much would you pay back if you paid the loan back in one year? b) How much would you pay back if you paid the loan back in two years? c) How much can you save in 24 months if you paid cash for

Let's break down each part of the problem step by step. ### Given: - **Cost of Motorcycle:** R25,250 (cash price) - **Interest Rate:** 10% per year - **Loan Term:** 1 year and 2 years for parts a and b respectively Assuming **simple interest** (where interest is calculated only on the principal amount), we can use the formula: \[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \] ### a) Amount to Pay Back in One Year **Calculations:** \[ \text{Interest} = R25,250 \times 10\% \times 1 = R25,250 \times 0.10 = R2,525 \] \[ \text{Total Amount to Pay Back} = \text{Principal} + \text{Interest} = R25,250 + R2,525 = R27,775 \] **Answer:** You would pay back **R27,775** after one year. --- ### b) Amount to Pay Back in Two Years **Calculations:** \[ \text{Interest} = R25,250 \times 10\% \times 2 = R25,250 \times 0.10 \times 2 = R5,050 \] \[ \text{Total Amount to Pay Back} = \text{Principal} + \text{Interest} = R25,250 + R5,050 = R30,300 \] **Answer:** You would pay back **R30,300** after two years. --- ### c) Savings if You Pay Cash Instead of Borrowing for 24 Months (2 Years) By paying cash, you avoid paying the interest on the loan. From part b, we know that the interest over two years is R5,050. **Answer:** You can save **R5,050** by paying cash for the motorcycle instead of borrowing over two years. --- ### Summary - **a)** Pay back **R27,775** after 1 year. - **b)** Pay back **R30,300** after 2 years. - **c)** Save **R5,050** by paying cash instead of borrowing for 2 years.