Question

Find the simple interest owed for the use of the money. Assume 360 days in a year and round the answer to the nearest cent.

P=$2000, R=7%, T=1 year
a) $140.00
b) $150.00
c) $130.00
d) $120.00

Answer 1

The simple interest on a principal of $2000 at a rate of 7% for 1 year is $140. The simple interest formula SI = P × R × T is used to calculate the interest.

Step-by-step explanation:

The student asked to find the simple interest on a principal amount of $2000 at a rate of 7% for the time period of 1 year. We can apply the formula to determine the simple interest.

Simple Interest (SI) = P × R × T

We can plug in the values given:

P (Principal) = $2000R (Rate) = 7% or 0.07 (as a decimal)T (Time) = 1 year

Therefore, the simple interest is calculated as follows:

$2000 × 0.07 × 1 = $140