Question

You get a student loan from the New Mexico Educational Assistance Foundation to pay for your educational expenses this year. Find the interest on the loan if you borrowed $5000 at 5% interest for 1 year.

Answer 1

The interest on the $5000 loan at 5% interest for 1 year is $250.

Step-by-step explanation:

To find the interest on a loan, we can use the formula: Interest = Principal x Rate x Time.

In this case, the principal is $5000, the rate is 5% (which can be written as 0.05), and the time is 1 year.

Plugging in these values into the formula, we get: Interest = $5000 x 0.05 x 1 = $250.

Therefore, the interest on the loan is $250.