You have agreed to loan the owner of a library $5000 for 5 years at a simple interest rate of 8% per year. 1. How much interest will you receive from the loan? 2. How much will the library owner pay...

Question

Question

You have agreed to loan the owner of a library $5000 for 5 years at a simple interest rate of 8% per year. 1. How much intere

Answer 1

Answer #1

Answer : 1) Here

P (Principal amount) = $5000

T (Time) = 5 years

R (Interest rate ) = 8% = 0.08

Simple interest (S.I.) = P * R * T

=> S.I. = 5000 * 0.08 * 5

=> S.I. = 2000

Therefore, here I will receive $2,000 as interest from loan.

2) Total amount after 5 years = Principal amount + Simple interest amount

=> Total amount after 5 years = 5000 + 2000 = $7,000

Therefore, after 5 years the library owner will pay me $7,000.

Answer 2

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