1)

a)

Kelly takes a loan from her bank today. She needs to make a single repayment of $7,500 in 2 and a half years. The interest rate is 5% p.a. effective. Calculate the following items. (Round your answer to the nearest cent.)

i. The amount of money borrowed by Kelly. (1 mark)

ii. The total simple interest charged by the bank. (1 mark)

iii. The interest on interest charged by the bank. (1 mark