Question

Tshepo needs R5 000 urgently. He goes to the bank and borrows the money at an interest rate of 28% per annum, compounded monthly. The amount of money that Tshepo will have to pay the bank in fifteen months' time is​

Answer 1

R8000.

Explanation:

First, let's calculate the amount they are going to have to pay the bank after 1 year. It is given by the following expression:

R5 000 * 1.28= R6400

Therefore, they have to pay R6400/12 monthly.

Now, in fifteen months the total amount to pay should be (R6400/12) * 15= R8000.