Question

$10,000 for 5 years at 4% interest

Answer 1

Simple interest earned on the principal amount $10,000 for 5 years at 4% interest per year will be $12,000.

As given in the question,

Simple Interest:

The simple interest is an amount that is paid for loan or borrowed money over a certain period at a fixed percentage of borrowed money.

Principal amount:

Principal amount is the money that is taken as loan or borrowed.

Formula of Simple Interest:

Simple interest = Principal amount × Rate × Time

Since,

Principal amount = $10,000

Rate = 4% per year

Time = 5 years

Then,

Simple interest = 10,000 × 4 × 5

Simple interest = $ 12000

Total value after 5 years = $ 12000

Principal amount = $ 10000

Interest Earned = (Total value) - (Principal amount)

Interest Earned = $ 12000 - $ 10000

Interest Earned = $ 2000

Therefore, simple interest earned on the principal amount $10,000 for 5 years at 4% interest per year will be $12,000.

The complete question is:

Fabian is taking out a loan in the amount of $10,000. His choices for the loan are a 5-year loan at 4% rate of interest .What is the amount of simple interest and interest earned Fabian would have to pay?

To know more about simple interest here

brainly.com/question/25845758

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