To calculate the simple interest on a loan, you can use the formula:
\[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \]
Where:
- Principal is the initial amount of the loan,
- Rate is the interest rate (in decimal form),
- Time is the duration of the loan in years.
Given:
- Principal = $500
- Rate = 9% = 0.09 (as a decimal)
- Time = 3 years
Now, plug the values into the formula:
\[ \text{Interest} = 500 \times 0.09 \times 3 \] \[ \text{Interest} = 500 \times 0.27 \] \[ \text{Interest} = 135 \]
So, the simple interest on a $500 loan for 3 years at 9 percent is $135.
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