Final answer:
Simple interest can be calculated using the formula I = PRT. For a $5,000 loan at 6% over three years, the interest is $900. To find the interest rate from the interest earned, rearrange the formula to R = I / (PT), which shows a 1% interest rate for a $500 interest earned on a $10,000 loan over five years.
Step-by-step explanation:
The simple interest on a loan can be calculated using the formula I = PRT, where I is the interest, P is the principal amount, R is the interest rate per period, and T is the time in years. For example, the total amount of interest on a $5,000 loan with a simple interest rate of 6% over three years would be $5,000 * 0.06 * 3 = $900. To find the interest rate charged on a loan from the interest earned, you can rearrange the formula: R = I / (PT). Therefore, if $500 in interest is earned on a $10,000 loan over five years, the interest rate would be $500 / ($10,000 * 5) = 0.01 or 1%.