Hello!

I need to calculate interest rates for a 2 month loan of 8,000. The interest rate is 18 %. What would the interest be for 2 months? Do I need to multiply by 2/12?
Any help is always appreciated!!!
RainieB

I need to calculate interest rates for a 2 month loan of 8,000. The interest rate is 18 %. What would the interest be for 2 months? Do I need to multiply by 2/12?
Any help is always appreciated!!!
RainieB
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RainieB,
Yes, multiply 2/12.
Reason as follow:
Loan amount 8,000.
Becarefull about "interest rate 18%" it is annual rate.
So, annual interest will be 8000 * 18% = 8000 * (18/100) = 1440.
Another words the interest for 12 months will be 1440.
But the question is asking only for 2 month.
So, 1st to find monthly interest is 1440 /12 = 120 is the interest for one month.
Therefor, 2 month interest will be 120 * 2 = 240.

Thank you so much! Math definitely was not my strong subject!!
RainieB