Calculate the simple interest on a $100,000 investment at an interest rate of 12 percent a year after. 6 months

1 answer

Simple interest can be calculated using the formula:

\[ \text{Simple Interest} = P \times r \times t \]

where:

  • \( P \) is the principal amount (the initial investment),
  • \( r \) is the annual interest rate (in decimal),
  • \( t \) is the time the money is invested for (in years).

In your case:

  • \( P = 100,000 \) (the investment),
  • \( r = 12% = 0.12 \),
  • \( t = 6 \text{ months} = 0.5 \text{ years} \).

Now, plug the values into the formula:

\[ \text{Simple Interest} = 100,000 \times 0.12 \times 0.5 \]

Calculating this gives:

\[ \text{Simple Interest} = 100,000 \times 0.12 \times 0.5 = 100,000 \times 0.06 = 6,000 \]

So, the simple interest on a $100,000 investment at an interest rate of 12% per year after 6 months is $6,000.