Question

How much interest is earned on a $5000 loan at 10% interest for three years

Answer 1

Simple interest formula:

`I=P*r*t`

P is the principal

r is the interest rate in decimal form

t is the time in years

For the given situation:

`\begin{gathered} P=5000 \\ r=(10)/(100)=0.1 \\ t=3 \\ \\ I=5000*0.1*3 \\ I=1500 \end{gathered}`

Then, the interest earned for three years is $1500