True or False: When Calculating Interest Expense on a 6-month Note, Multiply the Principal by the Interest Rate, and Then Multiply by 6/12
True, when calculating interest expense on a 6-month note, multiply the principal by the interest rate and then multiply by 6/12 to adjust for the time period.
by Sai V
Updated Oct 30, 2023
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True or False: When Calculating Interest Expense on a 6-month Note, Multiply the Principal by the Interest Rate, and Then Multiply by 6/12
True. The statement is accurate because when calculating interest expense on a 6-month note, you first multiply the principal by the interest rate and then adjust for the time period by multiplying it by 6/12, representing the 6 months out of the total 12 months in a year. This formula ensures the correct calculation of interest expense for a 6-month period.
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