A loan of $5,000 is taken out with a simple interest rate of 6% per annum. How much interest is accrued after 4 years?

Sun, 03 May 2026 18:35:52 +0000

Understanding Simple Interest: How a $5,000 Loan Grows to $6,320 in 4 Years at 6% Per Annum When borrowing money, understanding how interest accrues is essential for managing finances effectively. One common loan structure is simple interest, where interest is calculated only on the original principal amount over time, without compounding. In this article, we’ll explore exactly how much interest accrues on a $5,000 loan over 4 years with a straightforward 6% annual interest rate. --- ### What Is Simple Interest?