If the simple interest on a certain amount of money saved in a bank for 5 years at 2\(\frac{1}{2}\)% annum is N500.00, calculate the total amount due after ...

If the simple interest on a certain amount of money saved in a bank for 5 years at 2\(\frac{1}{2}\)% annum is N500.00, calculate the total amount due after 6 years at the same rate

Answer Details

The simple interest on a certain amount of money saved in a bank for 5 years at 2\(\frac{1}{2}\)% per annum is N500.00. We can use the formula for simple interest to find the principal amount, which is the initial amount of money saved. Simple Interest (SI) = (Principal * Rate * Time) / 100 In this case, we know that the rate is 2\(\frac{1}{2}\)% per annum, which is equivalent to 0.025 as a decimal. We also know that the time is 5 years, and the simple interest is N500.00. We can plug these values into the formula and solve for the principal amount: 500 = (P * 0.025 * 5) / 100 P = 500 * 100 / (0.025 * 5) P = 4000 So the principal amount is N4,000.00. Now we need to calculate the total amount due after 6 years at the same rate. We can again use the formula for simple interest, but this time the time is 6 years instead of 5. Simple Interest (SI) = (Principal * Rate * Time) / 100 SI = (4000 * 0.025 * 6) / 100 SI = N600.00 So the simple interest for 6 years is N600.00. To find the total amount due after 6 years, we need to add the simple interest to the principal amount: Total amount due = Principal + Simple Interest Total amount due = 4000 + 600 Total amount due = N4,600.00 Therefore, the total amount due after 6 years at the same rate is N4,600.00.