Question

James invested $4,000 at 5% interest per year; how long will it take him to earn $200 in simple interest?

Answer 1

It takes 1 year.

Explanation:

You have to apply simple interest formula, I = (P×R×T)/100 where I represent interest amount, P is principle, R is interest rate and T is number of years :

`I = (PRT)/(100)`

`200 = (4000 * 5 * T)/(100)`

`20000 = 20000T`

`T = 1`

Answer 2

Given :

• Principal, P = $ 4,000
• Rate, R = 5 %
• Interest Amount, I = $ 200

To Find :

• Time, T = ?

Solution :

We, know that :

`\underline{\boxed{\sf Interest \: amount = (Principal * Rate * Time)/(100)}}`

`\underline{\boxed{\sf I = (P * R * T)/(100)}}`

By putting values, we have

`\sf : \implies 200 = (4000 * 5 * T)/(100)`

`\sf : \implies 200 * 100 = 20000 * T`

`\sf : \implies 20000 = 20000 * T`

`\sf : \implies \cancel{(20000)/(20000)} = T`

`\sf : \implies 1 = T`

`\underline{\boxed{\sf T = 1 \: year}}`

It takes 1 year for him to earn $ 200 in simple interest.