Mann Corporation signed a note with principal and interest due in 6 months. The stated rate of interest on the note was 8%. If Mann accrues three months of interest at year-end, the formula Mann will use will be: Principal x % x 3/12. (Input the number used to compute interest.)

Question

Gemma Spears

Mathematics

20 March, 05:46

Mann Corporation signed a note with principal and interest due in 6 months. The stated rate of interest on the note was 8%. If Mann accrues three months of interest at year-end, the formula Mann will use will be: Principal x % x 3/12. (Input the number used to compute interest.)

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Anabella Jackson · Answer 1

8

Step-by-step explanation:

8% is the annual interest rate. Since, only 3 month has been passed in the year end so, interest accrue of only 3 months.

8% is the interest of 12 months. So, 8%/12 is the interest rate of 1 month. But we want 3 month of interest rate. Multiplying (8%/12) * 3, we will get 3 month interest rate.

Note, that we have substituted x with 8. Because, we need interest rate of 3 month, and 8 is the interest rate of 12 months.