The simple interest is 0.5.
Simple interest is calculated on how much money you borrowed from a bank at a fixed rate calculated yearly mostly.There is also compound interest which is compounded after quarterly,half yearly,yearly.
In the given question
p/principal=1000 , r/rate= 0.05 , t/time= 1.
The formula is S.I = (p×r×t)/100
S.I = (1000×0.05×1)/100
= 10×0.05
= 0.5
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