SOLUTION: A person borrows $10,000 at a 10% simple interest rate for 1/2 year. How much simple interest / in dollars is owed on the loan at the end of 1/2 year?
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Question 1155526: A person borrows $10,000 at a 10% simple interest rate for 1/2 year. How much simple interest / in dollars is owed on the loan at the end of 1/2 year? Answer by jim_thompson5910(35256) (Show Source):
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P = 10000 is the amount borrowed (principal)
r = 0.10 is the interest rate in decimal form
t = 1/2 = 0.5 is the time elapsed in years
i = P*r*t is the simple interest formula
i = 10000*0.10*0.5
i = 500
Answer: 500 dollars
Side note: P+i = 10000+500 = 10500 dollars is ultimately paid back in total, since you must pay back the principal on top of the interest. Though the question is asking about the interest paid only.
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