Jill just borrowed $6,000 and will be charged a simple interest rate of 12 percent. Jill will pay ________ interest for borrowing the money on September 1 and repaying the money on December 31.
A) $240
B) $420
C) $720
D) $1,200

Question

Quizplus · Accepted Answer

Simple interest is calculated as principal * rate * time. Here, principal = $6,000, rate = 12% (or 0.12), and time = 4 months (or 4/12 of a year). So, the interest = $6,000 * 0.12 * (4/12) = $240.

Jill Just Borrowed $6,000 and Will Be Charged a Simple