A man borrows 40,000 naira on a short term loan and is charged interest of 1 naira on each 19 naira per week .
How much does he pay back altogether if he borrows the money :1 week
If the man borrows 40,000 naira and is charged an interest of 1 naira on every 19 naira per week, then we can calculate the total interest for 1 week by first determining how many times 19 naira goes into 40,000 naira.
Divide the total amount borrowed by the amount that incurs 1 naira of interest:
\( \frac{40,000 \text{ naira}}{19 \text{ naira}} \)
Let's perform the calculation:
\( 40,000 \div 19 \approx 2105.263 \)
Since you can't charge interest on a fraction of the 19 naira, you would typically round down to the nearest whole number because you typically wouldn't charge partial interest on a partial unit of the currency. So we will consider interest for only 2105 increments of 19 naira.
Multiplying this number by the interest rate per 19 naira:
\( 2105 \times 1 \text{ naira} = 2105 \text{ naira} \)
So the interest for one week is 2105 naira.
To find out how much the man pays back altogether, we add the interest to the principal amount (the amount borrowed):
Principal + Interest = Total repayment
\( 40,000 \text{ naira} + 2105 \text{ naira} = 42,105 \text{ naira} \)
The man has to pay back a total of 42,105 naira if he borrows the money for one week.