A man borrows 40,000 naira on a short term loan and is charged interest of 1 naira on each 19 naira per week .

Question

How much does he pay back altogether if he borrows the money :1 week

Answer 1

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:

$40,000÷19\approx 2105.263$

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.