What is the simple interest on a $1000 loan for 3 years at 5%?

Master the NLN PAX Mathematics 1 Exam with our comprehensive study guide and quizzes. Test your knowledge with multiple choice questions tailored for the PAX Math exam, featuring detailed explanations and tips to enhance your preparation and increase your chances of success.

Multiple Choice

What is the simple interest on a $1000 loan for 3 years at 5%?

Explanation:
Simple interest is found by multiplying the principal by the annual interest rate and the time in years: I = P × r × t. Here P = 1000, r = 0.05, and t = 3. So I = 1000 × 0.05 × 3 = 150. That means the interest over three years is $150, since you’re not compounding. The other numbers would require different times or rates, so they don’t fit the given terms.

Simple interest is found by multiplying the principal by the annual interest rate and the time in years: I = P × r × t. Here P = 1000, r = 0.05, and t = 3. So I = 1000 × 0.05 × 3 = 150. That means the interest over three years is $150, since you’re not compounding. The other numbers would require different times or rates, so they don’t fit the given terms.

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