When Interest Is Calculated for Periods Shorter Than a Year,the

question 199

Multiple Choice

When interest is calculated for periods shorter than a year,the formula to calculate interest is:

• A)I = P × R × T,where I = interest calculated,P = principal,R = annual interest rate,and T = number of months.
• B)I = P × R × T,where I = interest calculated,P = principal,R = annual interest rate,and T = (number of months ÷ 12).
• C)I = P × R × T,where I = interest calculated,P = principal,R = monthly interest rate,and T = (number of months ÷ 12).
• D)I = (MV − P)/T,where I = interest calculated,MV = maturity value,P = principal and T = number of months.

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