A simple interest rate is calculated only on the amount of principal invested. Simple interest does not take into consideration compounded or accrued interests. We are calculating the simple rate of interest for a $400 investment that was made over 5 years, at 7%/year.
For calculating simple interest (SI), the formula is SI = PxRxT where P represents principal amount, R represents rate and T represents time (in years). Given these values in our question; SI = 400 x 0.07 x 5 = 140 dollars.
It will then equal $400 + $140 = $540. It should also be noted that the same calculation can be done using online calculators such as https://www.calculatorsoup.com/calculators/financial/simple-interest-plus-principal-calculator.php which provide more convenience and accuracy than manually doing these calculations yourself