To calculate simple interest, you can use the formula:
\[ \text{Simple Interest} = P \times r \times t \]
where:
- \( P \) is the principal amount (the initial amount of money),
- \( r \) is the annual interest rate (in decimal form),
- \( t \) is the time the money is invested or borrowed for, in years.
In this case:
- \( P = 2000 \)
- \( r = 7% = 0.07 \)
- \( t = 3 \)
Now, plug in the values:
\[ \text{Simple Interest} = 2000 \times 0.07 \times 3 \] \[ \text{Simple Interest} = 2000 \times 0.21 \] \[ \text{Simple Interest} = 420 \]
Therefore, the simple interest earned after 3 years is $420.
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