Question

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If you borrowed $9,000 for 6 months at 10% annual simple
interest, how much must you repay at the end of the 6 months

Answer 1

$9450

Explanation:

We will use compound interest formula:

`F=P(1+r)^t`

Where

F is future amount [what we want to figure out]

P is present amount [9000]

r is rate of interest [since we want for 6 months, the annual interest divided by 2 is r. So r = 10/2 = 5% or 0.05]

t is the time [ the time period is for 6 months so t = 1 since we already converted the interest rate to 6 month chunk]

Putting in formula, we get:

`F=P(1+r)^t\\F=9000(1+0.05)^1\\F=9000(1.05)\\F=9450`