What is the interest earned on $500 invested for 7 years in an account that earns simple interest at a rate of 4% per year?

Question

Eva Abramson · Accepted Answer

The interest earned is #$140#.

Using the formula #SI=(PxxRxxT)/100#, we write: #SI=(500xx4xx7)/100# #SI=(5cancel00xx4xx7)/(1cancel00)# #SI=5xx4xx7# #SI=140#

Nathan Axel · Answer

undefined To calculate the interest earned on $500 invested for 7 years at a simple interest rate of 4% per year, you use the formula:

Interest = Principal × Rate × Time.

Substituting the given values:

Interest = $500 × 0.04 × 7 = $140.

So, the interest earned on the $500 investment would be $140.

HIX Tutor · Answer

undefined That’s a great question! Let’s figure it out together.

1. **What is simple interest?** Simple interest is a way to calculate how much money you earn on an investment over time.

2. **What is the formula for simple interest?** The formula is:  
   Interest = Principal × Rate × Time  
   Here, Principal is the money you start with, Rate is the interest rate, and Time is how long you invest.

3. **What are your numbers?**  
   - Principal = $500  
   - Rate = 4% (which is 0.04 as a decimal)  
   - Time = 7 years

4. **Plug the numbers into the formula:**  
   Interest = $500 × 0.04 × 7

5. **Do the math step by step:**  
   - First, multiply $500 by 0.04:  
     $500 × 0.04 = $20  
   - Next, multiply $20 by 7:  
     $20 × 7 = $140

6. **What is your answer?** The interest earned after 7 years is **$140**.

Does that make sense?