When interest is calculated for periods shorter than a year,the formula to calculate interest is:
A)I = P x R x T,where I = interest calculated,P = principal,R = annual interest rate,and T = number of months.
B)I = P x R x T,where I = interest calculated,P = principal,R = annual interest rate,and T = (number of months ÷ 12)
C)I = P x R x T,where I = interest calculated,P = principal,R = monthly interest rate,and T = (number of months ÷ 12).
D)I = (MV - P)/T,where I = interest calculated,MV = maturity value,P = principal and T = number of months.

Question

Quizplus · Accepted Answer

When calculating interest for periods shorter than a year, the time period T should be expressed as a fraction of a year, which is done by dividing the number of months by 12.

When Interest Is Calculated for Periods Shorter Than a Year,the