Final answer:
The student's question pertains to calculating the total amount of interest from loans using simple interest formulas. The total interest on a $5,000 loan at 6% for three years is $900. For a $10,000 loan over five years with $500 in simple interest, the interest rate charged would have been 1%.
Step-by-step explanation:
The subject of the student's question is Mathematics, specifically within the context of calculating simple interest on loans. The student is asking about how to determine the total amount of interest paid over time on a loan given at a fixed interest rate.
To calculate the total interest from a $5,000 loan over three years with a simple interest rate of 6%, you can use the simple interest formula: Interest = Principal × rate × time. For this example:
- Principal (P) = $5,000
- Rate (r) = 6% or 0.06 as a decimal
- Time (t) = 3 years
Using the formula, the calculation would be as follows:
Interest = $5,000 × 0.06 × 3 = $900
The total amount of interest from the $5,000 loan after three years would therefore be $900.
To solve the second example, where $500 in simple interest is received on a $10,000 loan over five years, use the rearranged interest formula to find the rate:
Rate = Interest / (Principal × time)
Inputting the values gives:
Rate = $500 / ($10,000 × 5)
Rate = $500 / $50,000
Rate = 0.01 or 1%
Therefore, the interest rate charged for the $10,000 loan over five years that resulted in $500 of simple interest was 1%.