1. **Problem:** Calculate the interest paid at the end of one year on a 1000 principal loan with 5% simple interest. 2. **Formula:** Interest $I = P \times r \times t$ where $P$ is principal, $r$ is annual interest rate, and $t$ is time in years. 3. **Calculation:** $I = 1000 \times 0.05 \times 1 = 50$ 4. **Explanation:** The interest is simply 5% of 1000 for one year, which equals 50. **Final answer:** 50