Sandy borrowed 6709 R. O from a bank to buy a piece of land. If the bank charges 12 1/3 % compounded each two months, what amount will she have to pay after 2 years and half? Also find the interest paid by her.

she is paying back 9112.5 R. O

Interest paid back is 2,403.95

Step-by-step explanation:

To find the amount, we use the compound interest formula.

This is given as;

A = I (1 + r/n) ^nt

where A is the amount we are trying to calculate

I is money borrowed = 6709

r is the interest rate = 12 1/3% = 37/3 = 12.33% which is same as 12.33/100 = 0.1233

n is the number of times interest is compounded. We have 15 2 months in 2 and a half years

t is the number of years = 2.5

Plugging these values, we have;

A = 6709 (1 + 0.1233/15) ^ (15) (2.5)

A = 6709 (1.0082) ^ (37.5)

A = 9112.95 R. O

Interest is amount - principal (money borrowed)

9112.95 - 6709 = 2403.95