Final answer:
To find the total interest of a $5,000 loan at a 6% simple interest rate over 3 years, calculate $5,000 x 0.06 x 3, which is $900. To determine the interest rate charged for $500 simple interest on a $10,000 loan over 5 years, use the formula to find that the rate is 1% per year.
Step-by-step explanation:
To calculate the total amount of interest from a $5,000 loan after three years with a simple interest rate of 6%, you use the simple interest formula: Interest = Principal × rate × time. For a principal of $5,000, a rate of 6%, and a time of 3 years, the calculation would be $5,000 × 0.06 × 3. This results in a total simple interest amount of $900 over the three years.
If you receive $500 in simple interest on a loan that you made for $10,000 for five years, to find the interest rate charged, rearrange the simple interest formula to solve for the rate as follows: $500 = $10,000 × rate × 5 years, which simplifies to rate = $500 / ($10,000 × 5). The interest rate, in this case, would be 1% per year.