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QUESTION: Hello:

The calculation for simple interest is interest amount = rate X time X principal amount.

The interest rate is usually per year. Is it possible to have interest for less or longer than one year. If so what would be the calculation for a rate for 6 months or 1 and 1/2 years?

I thank you for your reply!

ANSWER: "The interest rate is usually per year. Is it possible to have interest for less or longer than one year?"

The period can be something other than one year, but then you need to scale the units of time accordingly.

Suppose the rate is r% per year. That is is equivalent to 0.5r% per half-year, or 1.5r per 1½ years.

This applies to simple interest only, not compound interest.

---------- FOLLOW-UP ----------

QUESTION: Hello:

I want to thank you for your reply;

Can you explain "... need to scale the units of time accordingly."?

Can you provide a calculation with the rate less than one year?

"The calculation for simple interest is interest amount = rate X time X principal amount. The interest rate is usually per year."

interest dollars = r%/year × t years × principal dollars

If the period is half a year, the calculation changes to

interest dollars = (0.5r%/(half-year) × t half-years × principal dollars

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