Answer to Question #192474 in Financial Math for Beauty Magadlela

Question

An amount of R4 317,26 was borrowed on 5 May at a simple interest rate of 15% per year. The loan will be worth R4 500 on

[1] 16 August.

[2] 12 August.

[3] 21 August.

[4] 9 October.

[5] none of the above.

Answer 1

simple interest rate$,S=P(1+rt)$

$t=5may$ till 16 Aug

date value =228-125=103days

$t=103/365$

$S=p(1+rt)=4317,26(1+15/100\times 103/365)=R4500$

Therefore, the loan will be worth R4 500 on 16 August. The answer is [1] 16 August