Interest on a $3,000,10% promissory note for four months is:
A)$300.
B)$30.
C)$100.
D)$75.

Question

Quizplus · Accepted Answer

The formula for calculating simple interest is I = PRT, where I is the interest, P is the principal (amount borrowed), R is the rate (as a decimal), and T is the time (in years). In this case, P = $3,000, R = 0.1 (10% expressed as a decimal), and T = 4/12 (four months out of a year). Plugging these values into the formula, we get:
I = ($3,000)(0.1)(4/12)
I = $100
Therefore, the interest on the promissory note is $100. Choice C is the correct answer.

Interest on a $3,000,10% Promissory Note for Four Months Is