The interest owed I if a amount A is borrowed at a interest rate r for t years is given by the formula:
[tex]\begin{gathered} I=A\cdot(1+r)^t-A \\ I=A\lbrack(1+r)^t-1\rbrack \end{gathered}[/tex]For A = $840, r = 0.055 and t = 7, we have:
[tex]\begin{gathered} I=840\cdot(1+0.055)^7-840 \\ I=\text{ \$381.93} \end{gathered}[/tex]