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Write an algebraic equation for the following problem and then solve it:

Rebecca and Chris borrowed $2000 at a simple interest rate of 7% for a period of 3 years. What was the interest?

Write an equation for the interest [tex]\(I\)[/tex] earned:
[tex]\[ I = P \times r \times t \][/tex]
where:
- [tex]\(P = 2000\)[/tex]
- [tex]\(r = 0.07\)[/tex]
- [tex]\(t = 3\)[/tex]

The interest is [tex]\( I = 2000 \times 0.07 \times 3 \)[/tex].

(Simplify your answer.)



Answer :

GinnyAnswer
Sure, let's go through the problem step-by-step.

First, we need to calculate the simple interest. The formula for calculating simple interest is given by:

[tex]\[ I = P \times R \times T \][/tex]

where:
- [tex]\( I \)[/tex] is the simple interest,
- [tex]\( P \)[/tex] is the principal amount (the initial amount of money borrowed),
- [tex]\( R \)[/tex] is the annual simple interest rate (expressed as a decimal),
- [tex]\( T \)[/tex] is the time the money is borrowed for, in years.

Given:
- Principal amount, [tex]\( P \)[/tex] = [tex]$2000, - Annual interest rate, \( R \) = 7% = 0.07 (as a decimal), - Time period, \( T \) = 3 years. Using these given values in the formula, we get: \[ I = 2000 \times 0.07 \times 3 \] Thus, the interest \( I \) earned will be: \[ I = 2000 \times 0.07 \times 3 = 420.0 \] So, the interest Rebecca and Chris earned is $[/tex]420.