A cowpea farmer obtained a loan of D50,000.oo from his co-operative society at an interest rate of 5%. Calculate the interest to be paid on the borrowed cap...
Question 1 Report
A cowpea farmer obtained a loan of D50,000.oo from his co-operative society at an interest rate of 5%. Calculate the interest to be paid on the borrowed capital after one year?
Answer Details
To calculate the interest to be paid on the borrowed capital, we can use the simple interest formula:
Interest = Principal * Rate * Time
Where:
- Principal = D50,000.00 (the borrowed capital)
- Rate = 5% (the interest rate)
- Time = 1 year
Plugging in the values:
Interest = 50,000.00 * 0.05 * 1
Interest = 2,500.00
Therefore, the interest to be paid on the borrowed capital after one year is D2,500.00. The correct option is (a) D2,500.00.
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