#### Explanation:

To calculate interest the formula is : $P r t = i$
where P= Principle, r=rate as a decimal, t+ time in years.
(assuming simple interest)

$P r t = i$

$5000 \cdot 0.07 \cdot 3 = i$

i=$1050 Jul 17, 2017 $1050

#### Explanation:

$\textcolor{b l u e}{\text{Preamble}}$

The question does not state if simple or compound interest.

Also the wording 'could' be interpreted to mean that: The total interest gain over the whole of 3 years is 7%. This would mean an annual interest of 7/3%

Note that % is a bit like units of measurement but one that is worth $\frac{1}{100}$

So " "7%-> 7xx%->7xx1/100=7/100

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$\textcolor{b l u e}{\text{Answering the question}}$

Assumption: $\underline{\text{Annual simple interest}}$ is set at 7%.

dropping the $sign for now. 7%" of "$5000 ->7/100xx5000

but 5000 is the same as $5 \times 10 \times 100$ so we can write:

$\frac{7 \times 5 \times 10 \times 100}{100} \text{ "=" } 7 \times 5 \times 10 \times \frac{100}{100}$

but $\frac{100}{100} = 1$ so we end up with

$7 \times 5 \times 10 \times 1 = 350$

Now we put the $back in giving $350

But this is for 1 year.

So 3 years is #3xx$350 =$1050