# What is the interest of a problem that says $6125 at 7% per year for 2.5 years?

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Simple Interest: `I=Prt`

Where I = interst, P = principal, r = rate, and t = time in years.

`I = (6125)(0.07)(2.5)`

`I = 1071.875 `

**The interest earned from a principal of 6125 at a 7% rate for 2.5 years would be $1071.88.**

Compound Interest: `I = P(1 + r/n)^(nt)`

I = interest, P = principal, r = rate, n = number of times interest is compounded per year, and t= number of years.

**Sources:**

To solve, use the Simple Interest formula

`I =Prt`

where,

I - Interest earned

P - Principal amount

r - rate of interest

t - period

So, plug-in the given values to the formula.

`I=6125 * 0.07 * 2.5`

`I=1071.875`

**Hence, the interest earned is `$1071.875` .**