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| Math Central | Quandaries & Queries |
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Question from Delbert, a parent: If my principal balance if $16000.00 and I paid 7% interest per annum but only kept the loan for 6 months How much interest would I owe after 6 months. |
Delbert,
The interest is 7% per year so in one year the interest would be
$16000.00 × 0.07 = $1,120.00
In half a year the interest would be half of this, that is
$16000.00 × 0.07 × 1/2 = $560.00
However if you took the loan for a year but paid it off in half a year the lender may charge you a penalty for doing so.
Harley
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