Question

Cady has $3000 to deposit in the bank which offers 4% interest. How long does she need to leave the money in the bank in order to earn $600 in interest?

Answer 1

Cady will have to leave the money in the bank for 5 years.

Explanation:

Given that Cady has invested $ 3000 in an account with an interest rate of 4%, to know how much time must be invested to obtain $ 600 in interest, the following calculation must be performed:

3000 x 1.04 = 3.120

Thus, each year the investment will yield interest for $ 120. Therefore, since 600/120 is equal to 5, Cady will have to leave the money in the bank for 5 years.