Question

Interest earned: $84
Principal: $600
Interest rate: 7%
Time: ?

Answer 1

The time is
`2\ years`

Explanation:

we know that

The simple interest formula is equal to

`A=P(1+rt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

`t=?\ years\\ P=\$600\\ A=\$600+\$84=\$684\\r=0.07`

substitute in the formula above

`\$684=\$600(1+(0.07)t)`

solve for t

`t=[(684/600)-1]/0.07=2\ years`