Question

max wholesaler borrowed $11,500 on a 7%, 120-day note. after 45 days, max paid $4,025 on the note. thirty days later, max paid an additional $3,450. use ordinary interest.

Answer 1

To calculate the total amount of interest on a loan, you need to use the simple interest formula: I = PRT. For the first question, the total interest on a $5,000 loan after three years at 6% is $900. For the second question, the interest rate charged on a $10,000 loan for five years, with $500 interest, is 1%.

Step-by-step explanation:

To calculate the total amount of interest on a loan, you need to use the simple interest formula: I = PRT

Where:

• I is the interest
• P is the principal (loan amount)
• R is the interest rate
• T is the time (in years)

For the first question, the loan amount is $5,000, the interest rate is 6%, and the time is 3 years. Plug these values into the formula:

I = (5000)(0.06)(3) = $900

So, the total amount of interest from a $5,000 loan after three years with a simple interest rate of 6% is $900.

For the second question, the loan amount is $10,000, the interest received is $500, and the time is 5 years. Plug these values into the formula:

500 = (10000)(R)(5)

R = 500/50000 = 0.01 = 1%

So, the interest rate charged on the loan was 1%.