Question

Joe borrowed $2000 from the bank at a rate of 7% simple interest per year. How much interest did he pay in five years?

Answer 1

I = PRT

I = 2,000 * 0.07 * 5

I = ?

Answer 2

The formula for simple interest is
A = P(1 + rt) where P is the Principal (money you start with),R is the rate/percent and T is time.

A = 2000(1 + .07(5))
A = 2000(1 + .35)
A = 2000 (1.35)
A = 700

The interest he paid should be $700.