Question

Suppose you are taking out a loan for $10,000, at an annual percentage rate of 5%, for a term of 5 years. What is the amount of accrued interest?

Principal - $10,000.00

Rate - 5%

Time - 5 years

Answer 1

$2500

Explanation:

The accrued interest is given by the formula ...

i = Prt

i = interest; P = principal amount of the loan; r = annual interest rate; t = number of years.

__

Fill in the values and do the arithmetic.

i = $10000×0.05×5 = $2500