From the statement of the problem we know that:
• the principal amount of money invested is P = $85000,
,• the rate per year is 7.5%, in decimals r = 0.075,
,• the time is t = 5 years.
The interest earnt I is equal to the difference between the total accrued amount A and the principal amount P:
[tex]I=A-P=P(1+r\cdot t)-P=P\cdot r\cdot t.[/tex]Replacing by the data of the problem we find that the simple interest is:
[tex]I=85000\cdot0.075\cdot5=31875.[/tex]Answer
The simple interest is $31875.
