To calculate the simple interest, we need to first convert the time period from years to months. Since the interest rate is 12 percent per year, the monthly interest rate can be found by dividing 12 percent by 12 (the number of months in a year).
Monthly interest rate = 12 percent / 12 = 1 percent per month
Next, we calculate the simple interest using the formula:
Interest = Principal * Rate * Time
where:
- Principal is the initial investment ($100,000),
- Rate is the monthly interest rate (1 percent),
- Time is the number of months (6).
Interest = $100,000 * 1% * 6 = $100,000 * 0.01 * 6 = $6,000
Therefore, the simple interest on a $100,000 investment at an interest rate of 12 percent per year after 6 months is $6,000.
Calculate the simple interest on a $100000 investment at an interest rate of 12 percent a year after 6 months
1 answer
1 answer