What is the simple interest on a loan of $4,000 at a 3% interest rate for 5 years?
we know that
The simple interest formula is equal to
where
A is the Final Value
P is the Principal amount of money
r is the rate of interest
t is Number of Time Periods
in this problem we have
P=$4,000
r=3%=3/100=0.03
t=5 years
Find the value of A
Find out the interest
I=A-P
so
I=4,600-4,000
I=$600
the answer is $600