Question

Wang, Inc. borrowed $10,000 from Second National Bank on January 1, 2010. The loan is to be repaid on July 1, 2010, along with interest at 6% per year. How much interest should be paid on July 1?

Answer 1

The amount of interest that should be paid on July 1 is $300.

Step-by-step explanation:

To calculate the interest on the loan, you can use the formula:

Interest = Principal x Rate x Time

In this case, the Principal is $10,000, the Rate is 6% per year, and the Time is 6 months (since the loan is to be repaid on July 1, which is 6 months after January 1).

Using the formula, the interest can be calculated as follows:

Interest = $10,000 x 0.06 x 0.5 = $300

Therefore, the amount of interest that should be paid on July 1 is $300.

Answer 2

$300

Step-by-step explanation:

Given that:

Amount borrowed = $10000

Date borrowed = Jan 1, 2010

Repayment date = July 1, 2010

Interest rate = 6% ; time = 6 months = 0.5 year

Using the relation :

A = P(1 + rt)

A = final amount to be paid

A = 10000(1 + 0.06*0.5)

A = 10000(1 + 0.03)

A = 10000(1.03)

A = $10,300

Interest paid = $10300 - $10000 = $300