Miguel Rodriguez borrowed $300 from his brother Julio to pay for books and tuition. He agreed to pay Julio in 6 months with simple annual interest at 6.5%.
a) How much will the interest amount to?
Answer: We are given:
Borrowed Amount = $300
Interest Rate = 6.5%
Time = [tex]\frac{1}{2}year[/tex]
[tex]Interest = 300 \times 0.065 \times \frac{1}{2}[/tex]
[tex]=9.75[/tex]
Therefore, simple interest amount is $9.75.
b) What amount must Miguel pay Julio at the end of 6 months?
Answer: Therefore, the amount Miguel must pay Julio at the end of 6 months is:
$300 + $9.75 = $309.75
