Question

Nalini borrowed Rs 550 from her friend at 8% per annum. She returned the amount after 6 months. How much did she pay?

Answer 1

Principal amount (P) = Rs 550
Time period (T) = 6 months = $\frac{6}{12}=\frac{1}{2}$ year (1 year = 12 months)
Rate of interest (R) = 8% p.a.

Interest = $\frac{P\times R\times T}{100}=\frac{550\times 8\times 1}{100\times 2}=\mathrm{Rs}22$

Total amount paid after 6 months = Principal amount + Interest = Rs 550 + Rs 22
= Rs 572