Question

Miguel Rodriguez borrow 200 from his brother Julio to pay for books and tuition . He agreed to pay Julio 6!months with simple annual interest at 6.2% A)how much with the interest amount to ? B) what amount must Miguel pay Julio at the end of 6 months ?

Answer 1

To answer the problem, you must the formula in finding the interest and after that we will add it to the principal to get the future value.

The formula is: I = Prt

Interest = Principal x rate x time

= 200 x 0.062 x 6/12

= $6.2 is the interest for 6 six months.

 

Future Value = Principal + Interest

FV = 200 + 6.20

FV = $206.20 is the amount to be paid at the end of 6 months.