If Paul had $500 000 to invest at 6%p.a interest how much interest would he make over 4 months?

Question

If Paul had $500 000 to invest at 6%p.a interest how much interest would he make over 4 months?

Answer 1

Depends whether the interest is calculated daily and compounded, on a strictly 'per annum' basis you're talking  $10,000.

Answer 2

(500,000 x .06)/3 = 10,000

Answer 3

The formula for calculating simple interest earned is

I = P x r x t

where I is the amount of interest earned; P is the principal sum invested; r is the rate per annum as a fraction; and t is the number of months the principal is invested divided by 12.

So substituting in this formula we get

Interest earned = 500,000x6/100x 4/12

Interest earned = 10,000