Question

You ask your best friend to lend you ₹400 to buy your favourite toy. He says that he can lend you the money only if you give him an extra ₹10 for every six months that pass before you return it.

What is the total amount you must pay him if you return it after one and a half years?
What is the annual rate of interest he is charging you?

Answer 1

430

Explanation:

every year is 12 months

1 1/2 years is 18 months, and 18/6=3, so 3*10=30

30₹ extra, plus beginning 400₹, is 430₹.

hope this helps!

Answer 2

$430 and 5%

Explanation:

You borrowed from your best friend = $400

He said that you have to pay $10 for every six months as interest.

If you return it after one and a half years (18 months) that is 18 ÷ 6 = 3 times You must pay $10, 3 times that is 10 × 3 = $30 (Interest)

The total amount you must pay him is 400 + 30 = $430 after one and a half years.

Now we calculate the rate of interest.

In 6 months you pay $10, so you pay $20 in one year.

We find out the percentage of interest of $20 on the money $400,

20 ÷ 400 × 100 = 5%

You must return him $430 and He is charging 5% annual rate of interest.