Explanation:
To calculate the future value of a loan with simple interest, we can use the formula:
A = P(1 + rt)
where A is the future value or total amount due, P is the principal, r is the interest rate, and t is the time period in years.
In this case, we have:
P = $1000
r = 5.0% = 0.05 (expressed as a decimal)
t = 6 months = 0.5 years (since there are 12 months in a year)
Plugging these values into the formula, we get:
A = $1000(1 + 0.05 x 0.5)
A = $1000(1.025)
A = $1025
Therefore, the future value or total amount due on the loan after 6 months is $1025.