RatedrillSimple interest earned
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
You lend $2,000 to a local bakery at 2.25% simple interest per year. The interest is paid in one sum at the end and never earns interest itself. How much interest is owed after 7 years?
What this problem teaches
The formula: I = P × r × t. No TVM keys are needed: simple interest is a single multiplication.
A hint if you get stuck
Simple interest is principal × annual rate × years. The rate always applies to the original principal.
Try it now, no account needed
This problem is free. Open it on the practice page, solve it, and get instant feedback with a hint and a worked solution after two tries.
Open this problem