A food-processing co-operative has a variable-rate loan. Assume simple interest. The outstanding loan balance remains £1,200,000 throughout the year.
| Period | Annual interest rate |
|---|---|
| January to April | 3.2% |
| May to December | 4.1% |
Calculate how much more interest the co-operative pays during the year than it would have paid if the annual interest rate had remained at 3.2%.
82 exam-style questions on OCR GCSE Economics 2.8 The role of money and financial markets, covering 2.8.1 Money as a medium of exchange, 2.8.2 Role of the financial sector, 2.8.3 Importance of the financial sector, 2.8.4 Interest rates and saving, borrowing, investment, and 2.8.5 Effect of interest rate changes. Each one has a worked solution and a mark scheme showing where the marks go.