Mathematics

Question

You want to put $2,500 in a simple interest account. It has a 4% annual interest rate. How long must you invest that money to earn $500 in interest?

2 Answer

  • I=PRT
    I=interset
    P=amount put in
    R=rate in decimal
    T=time in years


    given
    I=500
    P=2500
    R=4%=0.04
    T=?


    500=2500(0.04)?
    500=100?
    divide both sides by 100
    5=?
    5 years
  • Answer

    It will take you 5 years.

    Step-by-step explanation:

    We have to find how long must someone invest $2,500 in a simple interest to earn $500 at at a 4% annual interest rate. Formula for the simple interest is: I = P * r * t, where: I = $500, P = $2,500, r = 0.04 and t stays for the number of the years. 500 = 2,500 * 0.04 * t; 500 = 100 * t; t = 500 : 100; t = 5. Answer: 5 years.

    Hope this helped!

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