If it's simple interest and the rate is 5% yearly, then --
5,000 * 0.05 = 250
250 * 5 = 1,250
5,000 + 1,250 = 6,250
The answer would be different if you charged compound interest.
If I loaned someone $5000 four years ago at an interest rate of 5%, how much do they owe me now?
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