Question

What is the simple interest of a note that has a face value of $12,000, a rate of 8%, and a term of 1 year?

Answer 1

Solution:

Given:

$\begin{gathered} P=\text{ \ }12,000 \\ R=8\text{ \%} \\ T=1year \end{gathered}$

Using the simple interest formula,

$\begin{gathered} I=\frac{PTR}{100} \\ I=\frac{12000\times1\times8}{100} \\ I=\text{ \ }960 \end{gathered}$

Therefore, the simple interest is $960.