A company lends $10,000 to an employee who signs a 9%,6-month promissory note.
What is the total amount of interest on this note?

Question

Quizplus · Accepted Answer

First, we need to calculate the interest by using the formula:

interest = principal x rate x time

Where:
- principal = $10,000
- rate = 9% per year / 2 (since it is a 6-month note)
- time = 6 months / 12 months per year

interest = $10,000 x 0.09/2 x 6/12
interest = $10,000 x 0.045
interest = $450

Therefore, the total amount of interest on this note is $450. Option B is the correct answer.

A Company Lends $10,000 to an Employee Who Signs a 9%,6-Month