Musa borrows N10.00 at 2% per month simple interest and repays N8.00 after 4 months. How much does he still owe?
Explanation
To find out how much Musa still owes, we first need to calculate the total amount of interest he accrued over the 4 months, add this to the principal amount, and then subtract the amount he has repaid.
Step-by-Step Calculation:
1. Calculate the total interest accrued:
- Principal = N10.00
- Interest rate = 2% per month
- Time = 4 months
- Interest = Principal \(\times\) Rate \(\times\) Time
\[
\text{Interest} = 10 \times \frac{2}{100} \times 4 = 10 \times 0.02 \times 4 = 10 \times 0.08 = 0.8 \text{ (Naira)}
\]
2. Calculate the total amount owed after 4 months:
- Total amount owed = Principal + Interest
\[
\text{Total amount owed} = 10 + 0.8 = N10.80
\]
3. Subtract the amount Musa has already repaid:
- Amount repaid = N8.00
\[
\text{Remaining amount owed} = 10.80 - 8.00 = N2.80
\]
Musa still owes N2.80
The correct answer is C. N2.80