Question

You want to save ₹120,000 to buy your first self-driving magic carpet. You deposit ₹80,000 in a bank at an interest rate of 5%, percent per annul.

How many years do you have to wait before you can buy your magic carpet?

Answer 1

`t=10\ 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=R80,000\\ A=R120,000\\r=5\%=5/100=0.05`

substitute in the formula above

`120,000=80,000(1+0.05t)`

`1.5=(1+0.05t)`

`0.05t=1.5-1`

`0.05t=0.5`

`t=10\ years`