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On October 1, Hill Corporation signed a 6-month note with principal of $10,000 and interest of $600 due in six months. The stated rate of interest on the note is
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On October 1, Hill Corporation signed a 6-month note with principal of $10,000 and interest of $600 due in six months. The stated rate of interest on the note is

User Pablo Albaladejo
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1 Answer

6 votes

Answer:

the stated interest rate on the note is 12%

Step-by-step explanation:

The computation of the stated rate of interest on the note is shown below:

= Interest ÷ Principal amount

= $600 ÷ $10,000

= 0.06

Since it is of six months but we have to determine annually

So we should multiplied it by 2

Like this

= 0.06 × 2

= 12%

hence, the stated interest rate on the note is 12%

User Jussi Kukkonen
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