Question

Mika has $2000.00 but she needs $4100.00. She found a savings account that will pay her 3% simple interest. How long will she have to leave her money in the account to reach her goal? Round to the nearest year.

Answer 1

Mika has to leave her money in the account for 35 years to reach her goal

Solution:

Given, Mika has $2000.00 but she needs $4100.00.

She found a savings account that will pay her 3% simple interest

Now, according to question,

Amount Mika has already(which is 2000) + 3 % simple interest on 2000 = 4100

This leaves us with a equation which is shown below:

2000 + simple interest on 2000 = 4100 --- eqn 1

So, let us calculate the simple interest on $ 2000 with 3% interest for "t" years

`\text { Simple interest }=\frac{\text { prinicipal amount } * \text {rate} * \text {time}}{100}`

`\begin{array}{l}{=(2000 * 3 * t)/(100)} \\\\ {=(2000 * 3 * t)/(100)=20 * 3 * t=60 t}\end{array}`

So, now, put this value in above equation 1,

2000 + simple interest = 4100

2000 + 60t = 4100

60t = 4100 – 2000

t = 35

Hence, she has the leave the amount of $2000 in the bank for 35 years.