1) A bank borrows $1,000,000 for 1 month at a simple interest rate of 9% per...

Question

Question

business finance

Answer 1

Answer #1

The formula for simple interest is:

Simple interest = P * r * n

where, P is principal amount = $1000000, r is rate of interest = 9%, n is time period = 1/12

Putting these values in the above formula, we get,

Simple interest = $1000000 * 9% * 1/ 12

Simple interest = $7500

After 1 month, the Bank will pay amount borrowed plus simple interest calculated above:

Total payment after 1 month = $1000000 + $7500 = $1007500

Answer 2

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