Question

Find the simple interest. Principle- $10,000 Rate – 4% Time in Months 6

Answer 1

The 1 year interest rate is 4% so the 6months rate is ... ?

Answer 2

As stated by BruLee, 4% is the interest rate per annum. So the 6 month rate is simply 4% / 2, which is 2%. So the final payoff is 10,000 * (1 + 0.02)

Answer 3

You can use the simple interest formula which is:

I=PRT
where I=Interest
Where P=Principle
WhereR=Rate of Interest
Where T=Time in Years

I=(10,000)(0.04)(1/2) where 1/2 is 6 months
I=$200