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Chapter 17: Problem 6

What is the total amount of interest from a \(\$ 5,000\) loan after three years with a simple interest rate of \(6 \% ?\)

Short Answer

Expert verified
The total amount of interest from a \(\$ 5,000\) loan after three years with a simple interest rate of \(6 \%\) is \(\$ 900\).

Step by step solution

01

Identify the given values

In this exercise, we are given the following values: - Principal (P): $5,000 - Interest rate (r): $6 \% = 0.06 - Time (t): 3 years
02

Plug the values into the simple interest formula

Using the simple interest formula, \( I = P \times r \times t \), plug the given values into their corresponding variables: \( I = 5,000 \times 0.06 \times 3 \)
03

Calculate the interest

Now, we'll calculate the interest using the values that we've plugged into the formula: \( I = 5,000 \times 0.06 \times 3 = 300 \times 3 = 900 \)
04

Write the final answer

After calculating the interest, we find that the total amount of interest from the \(5,000 loan after three years with a simple interest rate of \)6 \%\( is \)900. So the answer is: Total Interest = \(\$ 900\)

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