Compound interest: if someone does not pay there rent bill which is 200$ for 6 months at a 1.25% interest rate...

[Purehunter]

I just did a test and I was wondering if my answer was right, please tell me so... the problem is a compound interest problem, so it is.... if someone does not pay there rent bill which is 200$ for 6 months at a 1.25% interest rate how much would she have to pay with the added interest. My groupmates got 201.something and I got 212.something please respond thank you! (The initial bill does not get added on so not 200 x 6)

 

[Denis]

Your question is unclear....
If the rate is 1.25% simple interest for 6 months,
then the answer is 200*1.0125 = 202.50 exactly.

 

[Dr.Peterson]

You say it is compound interest; how often is it compounded? Monthly? I'd want to see the actual wording, which should also make it clear what was paid over those 6 months, and what is accruing interest.

Is it possible that they (correctly) got 201.25, and you dropped the zero and got 212.5?