Question

Odwa borrowed R500 from Luyanda four months ago and R700 nine months ago. He wants to liquidate these obligations with a single payment in 12 months' time from now. If a simple interest rate of 11% per year, is charged on all the amounts, the amount he will pay Luyanda in 12 months' time from now, is
A. R2113
B. 1871
C. 1408.08
D. 3697

Answer 1

Answer:

Odwa borrowed R500 from Luyanda four months ago and R700 nine months ago. He wants to liquidate these obligations with a single payment in 12 months' time from now. If a simple interest rate of 11% per year, is charged on all the amounts, the amount he will pay Luyanda in 12 months' time from now, is

A. R2113

B. 1871

C. 1408.08

D. 3697

Answer 2

Concept Introduction: Simple Interest is a very basic concept.

Given:

We have been Given: Odwa borrowed R500 from Luyanda four months ago and R700 nine months ago. He wants to liquidate these obligations with a single payment in 12 months' time from now.

To Find:

We have to Find: If a simple interest rate of 11% per year, is charged on all the amounts, the amount he will pay Luyanda in 12 months' time from now, is

A. R2113

B. 1871

C. 1408.08

D. 3697

Solution:

According to the problem, For the first borrowed amount, he will have to pay,

$amount = (p \times r \times t) + p \\ amount= (500 \times \frac{11}{100} \times \frac{16}{12} ) + 500 \\ amount = 73.33 + 500 = rs.573.33$

For the second borrowed amount, he will have to pay,

$amount = (700 \times \frac{11}{100} \times \frac{21}{12} ) + 700 \\ amount = 134.75 + 700 =rs. 834.75$

therefore total amount to be paid is,

$total = 573.33 + 834.75 = rs.1408.08$

Final Answer: The total amount to be paid is

$rs.1408.08$

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