Question

Meredith invested $5,500 into an account that earned 5% interest per year. When she cashed out the investment to use it as a down payment for a new car, it was worth a total of $7,739.05.

Which equation describes Meredith's investment based on t, the number of years she kept the account open?

Answer 1

Explanation:

Using I = PRT/100

where P = The principal amount invested = $5500

R = Rate of Interest =5%

T = Time (in years)

I = Interest = $7,739.05 - $5500 = $2239.05

Substituting the above values in the formula

I = PRT/100 becomes

2239.05 = 7,739.05 * 5 * t / 100 -------- Multiply 100 to both sides

2239.05 * 100 = 100 * 7739.05 * 5 * t / 100

223905 = 7739.05 * 5 * t

223905 = 38695.25t

Divide both sides by 38695.25t

223905/38695.25 = t

5.786369 = t

T = 5.79 (approximated)