Question

Miguel Rodriguez borrowed $500 from his brother Julio to pay for books and tuition. He agreed to pay Julio in 6 months with simple annual interest at 6.2% a.) how much will the interest amount to ?b.) what amount must Miguel pay Julio at the end of 6 months ?

Answer 1

Given:

Miguel Rodriguez borrowed $500 from his brother Julio to pay for books and tuition.

He agreed to pay Julio in 6 months with simple annual interest at 6.2%

So, the interest = r = 6.2% = 0.062

the time = t = 6 months = 6/12 years = 1/2 year

a.) how much will the interest amount to?

The interest is given by the formula:

`I=P\cdot r\cdot t`

Substitute with the given values:

`I=500\cdot0.062\cdot(1)/(2)=15.5`

So, the interest = I = $15.5

b.) what amount must Miguel pay Julio at the end of 6 months?

So, ​Miguel will pay the amount that he borrowed and the interest

so, he will pay:

`P+I=500+15.5=515.5`

So, the answer will be: $515.5