A Cooperative Society charges an interest of 5\(\frac{1}{2}\)% per annum on any amount borrowed by its members. If a member borrows N125,000, how much does he pay back after one year?
A
N136875
B
N131,875
C
N126750
D
N126250
Verified Correct Answer: B.
Step-by-Step Mathematical Solution
The rate of interest charge = 5\(\frac{1}{2}\)% p.a
The amount borrowed = N125, 000:00
Interest charge \(=\frac{11}{200} of N125,000\)
= 11 \(\times N625.00 = N6,875.00\)
The amount refunded by the member, with interest charged by the cooperative society
N125,000 + N6,875.00 = N131,875.00
Source: Myschool Past Questions Archive (Record #26667)