A company borrowed $1,000 by signing a six-month promissory note at 5% interest.The total amount of interest on this promissory note is $25.

Question

Quizplus · Accepted Answer

To find the amount of interest, we can use the formula:

interest = principal x rate x time

Where:
- principal = $1,000
- rate = 5% or 0.05 (as a decimal)
- time = 6 months or 0.5 years (since the note is for 6 months)

So, plugging in these values, we get:

interest = $1,000 x 0.05 x 0.5
interest = $25

Therefore, the statement is true.

A Company Borrowed $1,000 by Signing a Six-Month Promissory Note