How much simple interest is earned after 3 years if a person invests $2,000 at 7 percent a year

Answer 1

To calculate the simple interest earned, you can use the formula:

\[ \text{Simple Interest} = P \times r \times t \]

Where:

• \( P \) = principal amount (the initial amount of money) = $2,000
• \( r \) = annual interest rate (in decimal) = 7% = 0.07
• \( t \) = time in years = 3

Now, plug the values into the formula:

\[ \text{Simple Interest} = 2000 \times 0.07 \times 3 \]

Calculating it step by step:

1. \( 2000 \times 0.07 = 140 \)
2. \( 140 \times 3 = 420 \)

Thus, the simple interest earned after 3 years is $420.