Loan amount $5000, Loan term: 2 years, interest rate is 7%

700

Step-by-step explanation:

P is the principal amount, $5000.00.

r is the interest rate, 7% per year, or in decimal form, 7/100=0.07.

t is the time involved, 2 ... year (s) time periods.

So, t is 2 ... year time periods.

To find the simple interest, we multiply 5000 * 0.07 * 2 to get that:

The interest is: $700.00

Usually now, the interest is added onto the principal to figure some new amount after 2 year (s),

or 5000.00 + 700.00 = 5700.00. For example:

If you borrowed the $5000.00, you would now owe $5700.00