Question 858599
100 * .06 = $6 interest per year
If it's compounded ANNUALLY, she'll owe $106 at the end of 12 months.
Since she is contracting to pay it back in 13 months, it will be compounded again at the end of the 13th month.
$106 * .005 (1/12th of the 6% interest) = .53
Total to pay back: 106.53
Amount of interest: 6.53
.
If, however, she is paying it back with interest calculated at the end of the 13 months instead of annually, she'll pay:
100 * 6.5 (6% interest + {{{1/2}}}% interest)
Total to pay back: 106.50
Amount of interest: 6.50