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...
Question 1 Report
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 after one year?
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.
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