Final answer:
The student's question pertains to the mathematics of loans. We calculated the total interest on a $5,000 loan with a 6% simple interest rate over three years to be $900. Additionally, we determined the interest rate charged if $500 in interest was earned on a $10,000 loan over five years to be 1%.
Step-by-step explanation:
The student's question is about calculating various aspects of loans, including repayment amounts, interest rates, and the total amount payable over the term of the loan. Let's address two specific examples from the information provided:
Example 1: Total Interest on a Simple Interest Loan
To calculate the total interest on a $5,000 loan with a simple interest rate of 6% over three years, use the formula: Interest = Principal × rate × time. This calculation gives us:
Interest = $5,000 × 0.06 × 3 = $900.
Example 2: Calculation of Interest Rate
When given the total interest received from the loan ($500), the principal amount ($10,000), and the time period (5 years), we can find the interest rate by rearranging the formula for simple interest as follows:
Interest = Principal × rate × time
$500 = $10,000 × rate × 5
Rate = $500 / ($10,000 × 5) = 0.01 or 1%