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

Question

answers:

$600,000

$72,000

$7,200,000

$6,000

Answer 1

To calculate the simplest interest, we use the formula:

Simple Interest = Principal × Rate × Time

Given that the principal is $100,000, the interest rate is 12 percent (which is equivalent to 0.12), and the time is 6 months (which is equivalent to 0.5 years), we can plug in these values into the formula:

Simple Interest = $100,000 × 0.12 × 0.5 = $6,000

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