Answer : $507.50 after 6 months, $7.50 of it being interest
The following is a calculation of the interest you will have to pay if you take out a $500 loan for six months at an annual interest rate of 6%:
In the first place, we want to work out the financing cost for quite a long time, which is half of the yearly rate:
After multiplying the principal amount ($500) by the interest rate (3%) and the time (6/12 or 0.5 years), we can determine the loan's interest rate:
Interest = $500 x 3% x 0.5
Interest = $7.50
Subsequently, the aggregate sum you should repay following a half year is:
You will be required to repay $507.50 over the course of six months, with interest accounting for $7.50 of that amount. Principal plus interest equals $500.