Question

simple annual interest rate on a loan is 5%. What is the interest due on a loan of $3,500 after 1 year.

Answer 1

Use the formula for simple interest:
\[A = P(1 + rt)\]
P is the principle or initial investment. In our case, 3,500
r is the interest rate. Convert 5% to decimal form: .05
t is time, 1 year.
Solve this:\[A=3500(1+(.05)(1))\]
Remember Order of Operations, etc.