Question

if the simple interest on $2,000 for 6 years is $840, then what is the interest rate?
the rate is □%

Explanation:

Step1: Recall simple interest formula

The formula for simple interest is \( I = P \times r \times t \), where \( I \) is the interest, \( P \) is the principal amount, \( r \) is the annual interest rate (in decimal), and \( t \) is the time in years.

Step2: Identify known values

We know that \( I = 840 \), \( P = 2000 \), and \( t = 6 \). We need to solve for \( r \).

Step3: Substitute values into the formula

Substitute the known values into the formula: \( 840 = 2000 \times r \times 6 \).

Step4: Simplify the right side

Calculate \( 2000 \times 6 = 12000 \), so the equation becomes \( 840 = 12000r \).

Step5: Solve for r

Divide both sides by 12000: \( r = \frac{840}{12000} \). Simplify this fraction: \( r = 0.07 \).

Step6: Convert to percentage

To convert the decimal to a percentage, multiply by 100: \( r = 0.07 \times 100 = 7\% \).

Answer:

7