# What is the simple interest of a loan for $1,000 with 5 percent interest after 3 years?

Simple interest is a method to calculate the amount of interest charged on a sum at a given rate and for a given period of time.

## Answer: The simple interest of a loan for $1,000 with 5 percent interest after 3 years is $150.

Let us find the simple interest of a loan.

**Explanation:**

Simple interest is calculated with the following formula: **S.I. = P × R × T**

- P = Principal
- R = rate of interest in % per annum. The rate of interest is in percentage r% and is to be written as r/100.
- T = Time, usually calculated as the number of years.

P = $1,000, R = 5% = 0.05, T = 3

S.I = 1000 × 5% × 3

S.I = 1000 × (5/100) × 3

S.I = 150