A businessman borrowed sh 40000 from a lending institution at a simple interest rate of 2 1/2 % per month. How much did he pay back at the end of one year?

To calculate the amount that the businessman paid back at the end of one year, we need to find the total interest and add it to the principal loan amount.

First, let's calculate the total interest. The interest rate is given as 2 1/2% per month, which is equivalent to (2.5/100) or 0.025 as a decimal.

Since there are 12 months in a year, the total interest for one year can be calculated by multiplying the monthly interest rate by the number of months: 0.025 * 12 = 0.3.

The total interest for one year is 0.3 times the principal loan amount.

Now, let's calculate the interest amount: 0.3 * 40000 = 12000.

Next, we add the interest amount to the principal loan amount to get the total repayment amount: 40000 + 12000 = 52000.

Therefore, the businessman paid back sh 52000 at the end of one year.

40000 * [1 + (.025 * 12)]