How is interest calculated for 6 months?

Calculating Interest for 6-Month Deposits

Short-term interest rates determine the return on funds invested for six-month periods. These rates, such as the current 4.3564% annual rate, provide a fixed percentage yield over the deposit duration.

Simple Interest Formula:

The simple interest formula calculates the interest earned on a principal amount over a specific period, as follows:

Interest = Principal x Rate x Time

where:

• Principal is the initial amount deposited
• Rate is the annual interest rate (in decimal form)
• Time is the investment period in years

Applying to 6-Month Deposits:

To calculate the interest earned on a 6-month deposit, the time needs to be expressed in years. Since 6 months is half a year, the formula becomes:

Interest = Principal x Rate x (6 / 12)

Example:

Suppose you deposit $10,000 at an annual interest rate of 4.3564% for 6 months. The interest earned would be calculated as follows:

Interest = $10,000 x 0.043564 x (6 / 12)
Interest = $10,000 x 0.043564 x 0.5
Interest = $217.82

Therefore, you would earn $217.82 in interest on your $10,000 deposit over the 6-month period.