Question

You need to borrow 1000 to cover your school expenses for seven months. After calling several places you can choose Between a money store charging 17% simple interest per year or your family who will charge you 11% per year how much will you save by buying from your family

Answer 1

I need to borrow 1000 to cover my school expenses for seven months.

I have two options:

I can borrow Rs. 1000 from a money store, charging 17% simple interest per year.

Now, 7 months mean 7/12 years.

So, the interest is

I can borrow Rs. 1000 from my family, who charge 11% simple interest per year.

So, the interest is

So, the money I save by borrowing from family, is

So, I save Rs. 35 by borrowing from family.