If a loan of $5000 is taken at a simple interest rate of 6% per annum, how much

If a loan of $5000 is taken at a simple interest rate of 6% per annum, how much interest will be paid after 4 years?

If a loan of $5000 is taken at a simple interest rate of 6% per annum, how much interest will be paid after 4 years?

Step 1: Identify the principal amount (the initial loan). In this case, it is $5000.
Step 2: Identify the interest rate. Here, it is 6% per annum.
Step 3: Identify the time period for which the loan is taken. In this case, it is 4 years.
Step 4: Use the simple interest formula: SI = (Principal * Rate * Time) / 100.
Step 5: Plug in the values into the formula: SI = (5000 * 6 * 4) / 100.
Step 6: Calculate the multiplication: 5000 * 6 = 30000, then 30000 * 4 = 120000.
Step 7: Divide the result by 100: 120000 / 100 = 1200.
Step 8: The total interest paid after 4 years is $1200.

Simple Interest Calculation – Understanding how to calculate simple interest using the formula SI = (Principal * Rate * Time) / 100.