Question

A man borrowed 25million at a 5% compound interest. Two thirds of the amount then owing is paid back at the end of the year. How much will he have paid at the end of the year?

Answer 1

The man will have paid $17.5 million at the end of the year.

Step-by-step explanation:

To find out how much the man will have paid at the end of the year, we need to calculate two thirds of the amount owed. The amount owed at the end of the year can be found by applying the compound interest formula: final amount = principal × (1 + interest rate)time. In this case, the principal is $25 million, the interest rate is 5%, and the time is 1 year. So, the amount owed at the end of the year is $25 million × (1 + 0.05)1 = $26.25 million. Two thirds of the amount owed is 2/3 × $26.25 million = $17.5 million. Therefore, the man will have paid $17.5 million at the end of the year.