Question

Joe borrowed $8,000 from the bank at a rate of 7% simple interest per year. How much interest did he pay in 5 years?

Answer 1

Joe would be paying $700 in 5 years time.

Explanation:

($2,000)(0.07/year)(5 years)
= ($2,000)(0.07)(5)
= $700

Answer 2

Answer: 700

Step-by-step explanation:

From the Formula:

I = Pin

where : I - interest

P - principal

i - the interest rate

n - the number of years

I = Pin, plug in the given data as provided in the problem.

P = $2,000

i = 0.07 per year

n = 5 years

I = ($2,000)(0.07/year)(5 years)

= ($2,000)(0.07)(5)

= $700