Interest = Principal × Rate × Time = 2000 × 0.06 × 4 = $480

Wed, 29 Apr 2026 23:57:49 +0000

Understanding the Simple Interest Formula: How $2,000 Growth to $2,480 in 4 Years at 6% When it comes to calculating interest, one of the most fundamental and widely used formulas is the Simple Interest formula:
Principal × Rate × Time = Interest
This equation helps individuals and businesses alike understand how much money grows over time when deposited or invested money generates interest. In this article, we’ll explore a practical example: What does $2,000 grow to in 4 years at a 6% annual interest rate? --- ### What Is Simple Interest?