A finance company borrows money on which it pays interest at the rate of 14% pa. If it pays interest half yearly, find the return per half year on an investment of $1700
Please show working out thanks
If the finance company is paying interest out, how can there be a return? You say nothing about the income.
Return per half year to whom? The lender?
The lender gets 7% of 1700 back in the first half year.
That is just the question copied from a text book
To find the return per half year on an investment of $1700, you need to calculate the interest earned on the investment for each half year.
First, let's calculate the interest earned for one year. Since the interest rate is 14% per annum (pa), we can calculate the annual interest as follows:
Annual interest = Principal amount * Interest rate
= $1700 * (14/100)
= $238
Now, we need to calculate the interest earned for half a year. Since the interest is paid half yearly, the interest earned for half a year is half of the annual interest.
Interest for half a year = Annual interest / 2
= $238 / 2
= $119
Therefore, the return per half year on an investment of $1700 would be $119.