Interest 2

At the beginning of the year, Ms Mařasová obtained a loan from the bank of 75,000 CZK for three years at an interest rate of 12.5%. She will repay the loan and interest in one lump sum after three years. The bank compounds interest twice a year, always at the end of the calendar half-year. How much will she pay back to the bank at the end of the third year? What is the effective interest rate?

Final Answer:

x =  103125 Kc

Step-by-step explanation:

$$\begin{gathered} a=75000\text{Kc} \\ {p}_1=12.5\% \\ r=2 \\ {p}_2=p_1/r=12.5/2=\frac{25}{4}=6.25\% \\ {q}_1=p_1\%=\frac{p_1}{100}=0.125 \\ {q}_2=p_2\%=\frac{p_2}{100}=0.0625 \\ n=3 \\ u=n\cdot q_1\cdot a=3\cdot 0.125\cdot 75000=28125 \\ x=a+u=75000+28125=103125\text{Kc} \end{gathered}$$

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