Question

Michael invests $2,600 into a certificate of deposit (cd). If he earns 4.5% interest, how long will it take for him to earn $234 in simple interest?

Answer 1

2 years

Explanation:

Step one:

Given Information

Principal= $2600

rate = 4.5%

SImple interest = $234

Required

The time T of the investment

Step two:

the expression for simple interest is

`SI= PRT/100`

substitute

`234= 2600*4.5*T/100`

cross multiply we have

`234*100= 2600*4.5*T\\\\23400= 11700T\\\\`

divide both sides by 11700

`23400/11700= T\\\\T= 2 years`