Your rich Uncle Ralph is willing to loan you $5000 for three years and asks that you repay your loan with simple interest at the rate of 9% per year. How much will you repay after three years?

Question

Quizplus · Accepted Answer

To find out how much you will repay after three years with simple interest, you need to use the formula: 
Interest = Principal x Rate x Time
In this case, the principal (the amount borrowed) is $5000, the rate is 9%, and the time is three years. 
So, 
Interest = $5000 x 0.09 x 3 = $1350
The total amount to repay is the sum of the principal and the interest, which is: 
Total amount = Principal + Interest = $5000 + $1350 = $6350
Therefore, the best choice is D.

Your Rich Uncle Ralph Is Willing to Loan You $5000