How much interest does a loan of $5,000 accrue after 3 years at 6% per year?

How much interest does a loan of $5,000 accrue after 3 years at 6% per year?

• A. $900
• B. $750
• C. $800
• D. $1,000

Answer: (A)

To determine how much interest a loan of $5,000 accrues after 3 years at an annual interest rate of 6%, you would use the simple interest formula: Interest = Principal × Rate × Time In this case, the principal (the initial amount of the loan) is $5,000, the rate is 6% (expressed as a decimal, this would be 0.06), and the time is 3 years. Plugging in these values into the formula, you would perform the calculation as follows: Interest = $5,000 × 0.06 × 3 Calculating this step-by-step: 1. First, calculate the amount of interest per year: $5,000 × 0.06 = $300. 2. Then, multiply this annual interest by the number of years: $300 × 3 = $900. Therefore, the total interest accrued over three years would be $900. This is why the choice indicating $900 is the correct amount of interest accrued after 3 years.

To determine how much interest a loan of $5,000 accrues after 3 years at an annual interest rate of 6%, you would use the simple interest formula:

Interest = Principal × Rate × Time

In this case, the principal (the initial amount of the loan) is $5,000, the rate is 6% (expressed as a decimal, this would be 0.06), and the time is 3 years.

Plugging in these values into the formula, you would perform the calculation as follows:

Interest = $5,000 × 0.06 × 3

Calculating this step-by-step:

1. First, calculate the amount of interest per year:

$5,000 × 0.06 = $300.

2. Then, multiply this annual interest by the number of years:

$300 × 3 = $900.

Therefore, the total interest accrued over three years would be $900. This is why the choice indicating $900 is the correct amount of interest accrued after 3 years.