You borrow $1,200 at a rate of 4.5% for a period of 6 months. How much will you repay at the end of 6 months?

A. $27
B. $54
C. $1,173
D. $1,227

I've been seeing a lot of controversy about whether the answer is C or D, and I'm very confused.

1 answer

1200(1 + 0.045)^(1/2) = 1226.70
1200(1 + 0.045/12)^6 = 1227.25
1200(1 + .045*6/12) = 1227
It will be one of the above depending on whether the interest is compounded annually or monthly, or whether it is simple interest.

I cannot see how it would ever be C