A buyer agrees to buy Kevin for $5000 and pay back $6000 in 6 months' time. Identify the amount of principal and interest in this transaction.
10000$
6000/5000=1.20 - 1=.20 x100 =20% simple interest for 6 months or 1/2 a year.
Or 20% x 2 =40% annual interest rate compounded semi-annually.
Obviously, the principal is $5,000 and $1,000 is the interest for the 6-month period.
+13 
