Question

Sodium inc borrowed 280000in April 1the note requires interest at 12% and principal to be paid in one year, how much interest is recognized for the period from April 1 to December 31?

Answer 1

Given:

Principal = 280,000

Rate of interest = 12% per annum.

Time period is from April 1 to December 31.

To find:

The interest recognized for the period from April 1 to December 31.

Solution:

Time period from April 1 to December 31 is 9 months.

12 months = 1 year

1 month =
`(1)/(12)` year

9 month =
`9* (1)/(12)` year

So,

`Time=9* (1)/(12)`

`Time=(9)/(12)`

`Time=0.75`

Formula for interest is

`I=P* r* t`

where, P is principal, r is rate of interest and t is time.

`I=280,000* (12)/(100)* 0.75`

`I=25200`

Therefore, the the interest is 25,200.