Simple interest on a $1,250,000, 9%, 15-month note is
A) $112,500
B) $ 9,375
C) $140,625
D) none of these

Question

Quizplus · Accepted Answer

The formula for simple interest is:

Simple Interest = Principal x Rate x Time

Where:

Principal = $1,250,000 
Rate = 9% = 0.09 (as a decimal) 
Time = 15/12 years = 1.25 years

Plugging in the values:

Simple Interest = $1,250,000 x 0.09 x 1.25 
Simple Interest = $140,625

Therefore, the simple interest on the note is $140,625.

Simple Interest on a $1,250,000, 9%, 15-Month Note Is