/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Problem 6 What is the total amount of inte... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

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 the $5000 loan after three years with a simple interest rate of \(6\%\) is \(\$ 900\).

Step by step solution

01

Understand the simple interest formula

The simple interest formula is: \(I = P \times r \times t\), where \(I\) is the interest, \(P\) is the principal (loan amount), \(r\) is the simple interest rate, and \(t\) is the number of years.
02

Extract given information from the exercise

We are given the following details: Principal (\(P\)) = \(\$ 5,000\) Simple Interest Rate (\(r\)) = \(6\%\) Number of Years (\(t\)) = \(3\) years
03

Convert the percentage to a decimal

The simple interest rate is given as a percentage, so we need to convert it into a decimal form. To do that, divide the percentage by 100: \(r = \frac{6}{100} = 0.06\)
04

Use the simple interest formula to calculate the interest

Now that we have all the necessary values, we can plug them into our simple interest formula: \(I = P \times r \times t = 5000 \times 0.06 \times 3\)
05

Calculate the result

Multiply the numbers together: \(I = 5000 \times 0.06 \times 3 = 300\) \(I = 900\) The total amount of interest is \(\$ 900\).

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

What does a share of stock represent?

Why are banks more willing to lend to well established firms?

The Darkroom Windowshade Company has 100,000 shares of stock outstanding. The investors in the firm own the following numbers of shares: investor 1 has 20,000 shares; investor 2 has 18,000 shares; investor 3 has 15,000 shares; investor 4 has 10,000 shares; investor 5 has 7,000 shares; and investors 6 through 11 have 5,000 shares each. What is the minimum number of investors it would take to vote to change the company's top management? If investors 1 and 2 agree to vote together, can they be certain of always getting their way in how the company will be run?

If you receive \(\$ 500\) in simple interest on a loan that you made for \(\$ 10,000\) for five years, what was the interest rate you charged?

How is buying a house to live in a type of financial investment?
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.