Simple Interest Practice
Question 1
Calculate the simple interest of a $3000 loan
with the interest of 3% per year. The
duration of the loan is 5 years.
Answer
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Step by Step Solution
Step 1
We can start with the simple interest formula:
Where:
Where:
- P is the principal ($3000)
- r is the interest rate per year (3%)
- t is the loan duration in years (5 years).
Step 2
With P=3000, r=3% and t=5, we can substitute these values into the formula as shown (Take note that 3% must be changed to 3/100 before we can calculate):
Step 3
The calculated interest is $450. Hence, the answer is A.
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