Question

Darius has a 6-month loan for $500. He must pay 5.6% annual interest on the loan. Using the formula for simple interest, I = Prt, where I is interest owed, P is the amount borrowed, r is the rate as a decimal, and t is time in years, find the amount of interest owed by Darius after 6 months.

Answer 1

Firstly, multiply the principal P, interest in percentage R and tenure T in years.
For yearly interest, divide the result of P*R*T by 100.
To get the monthly interest, divide the Simple Interest by 12 for 1 year, 24 months for 2 years and so on.