Final answer:
The correct formula to calculate simple interest is Option A: I = P * R * T. Using this, the overall interest for a $5,000 loan over three years at 6% is $900. When $500 interest is received from a $10,000 loan over five years, the interest rate charged is 1%.
Step-by-step explanation:
The formula for calculating simple interest is I = P * R * T, where 'I' stands for the interest amount, 'P' represents the principal amount (the initial sum of money), 'R' is the interest rate per period, and 'T' is the time the money is invested or borrowed for. In this case, the correct formula to calculate interest based on the given information (I = $19.80, R = 3%, T = 1.5 years) is Option A: I = P * R * T.
To calculate the interest paid by a bond or earned on a loan, you would use this formula applied to the specific included figures. For instance, for question 6, the total amount of interest from a $5,000 loan after three years with a simple interest rate of 6% would be calculated as Interest = Principal ($5,000) * Rate (6% or 0.06) * Time (3 years), giving Interest = $5,000 * 0.06 * 3 = $900.
For question 7, using the formula Interest = Principal * Rate * Time, and the given that you received $500 in simple interest on a loan of $10,000 for five years, the interest rate can be calculated as follows: $500 = $10,000 * Rate * 5 years, Rate = $500 / ($10,000 * 5) = 0.01 or 1%. So, the interest rate charged was 1%.