A Cooperative Society, charges an interest of 51/2% per annum on any amount borrowed by its members. If a member borrows N125,000, how much does he pay back...

Answer Details

If the Cooperative Society charges an interest of 5¹/₂% per annum, then the total amount to be paid back by the member at the end of the year will be the principal amount plus 5¹/₂% of the principal amount. 5¹/₂% can be written as a fraction of 5/2 in its simplest form. Therefore, the interest on N125,000 will be (5/2) * N125,000/100 = N3125. The total amount to be paid back by the member after one year will be the sum of the principal and the interest, which is N125,000 + N3125 = N128,125. Therefore, the member will pay back N128,125 after one year. The option that matches this result is N131,875, which is not correct.