What is the simple interest on a $500 loan for 1 year at 6% annual rate?

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 $500 loan for 1 year at 6% annual rate?

Explanation:
Simple interest is found by multiplying the principal by the annual rate and the time in years: I = P × r × t. Here that’s 500 × 0.06 × 1 = 30, so the interest after one year is $30. The other numbers would correspond to a larger interest (or the total amount repaid) and don’t match the one-year, 6% rate scenario.

Simple interest is found by multiplying the principal by the annual rate and the time in years: I = P × r × t. Here that’s 500 × 0.06 × 1 = 30, so the interest after one year is $30. The other numbers would correspond to a larger interest (or the total amount repaid) and don’t match the one-year, 6% rate scenario.

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