00:01
Hey everyone, today we're solving problem number six from chapter 17 of the textbook, which asks, what is the total amount of interest from a $5 ,000 loan after three years with a simple interest rate of 6%.
00:15
So the formula we're going to use to find total amount of interest, which we'll call i, is going to be the principal value, p plus the principal value times the rate of interest times the time.
00:42
So we have principal plus and then in parentheses, principal times rate times time.
00:47
So the principal amounts.
00:48
Well, in this problem, it says there's a $5 ,000 loan.
00:52
So that's like kind of your essentially initial value.
00:55
And so that's going to be your principal value as well.
00:58
So we can put in 5 ,000 for p.
01:06
And then we know we need to add, and then in preemphasis, we have principal value, again, of 5 ,000.
01:18
Now we need to multiply it by the interest rate.
01:21
So we read the problem again.
01:22
It says, what is the total amount of interest from a $5 ,000 loan after three years with a simple interest rate of 6%.
01:31
So the rate itself is 6%.
01:33
And your rates will always be given in percentages, but you always want to convert them to decimals...