You deposit $2000 in an account that earns simple interest at an annual rate of 4%. How long must yo

Discussion in 'Calculator Requests' started by math_celebrity, Aug 22, 2017.

  1. math_celebrity

    math_celebrity Administrator Staff Member

    You deposit $2000 in an account that earns simple interest at an annual rate of 4%. How long must you leave the money in the account to earn $500 in interest?

    The simple interest formula for the accumulated balance is:
    I = Prt

    We are given P = 2,000, r = 0.04, and I = 500.
    500 = 2000(0.04)t
    80t = 500

    Divide each side by 80
    t = 6.25 years.
     

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