Question

You need a total of $1500 to go on a cruise. You have $500 and invest it in a savings account that has 10% simple interest. If you don't touch the investment, how long will it be before you have a total of $1500 and are able to go on your cruise?

Answer 1

20 years

Explanation:

Use the equation to calculate total amount after simple interest.
`A = P(1 + rt)`

A is for total amount.

P is for the principal, or starting amount/investment.

r represents the rate of interest in decimal form.

t represents the time passed, usually in years.

We know:

A = 1500

P = 500

r = 10%

We need to find t = ?

Convert "r" from percentage into decimal form by dividing by 100, or moving the decimal to the left two places.

10% = 0.1 = r

Substitute the values r=0.1 , A=1500 , P=500 into the equation. Then isolate t.

A = P(1 + rt)

1500 = 500(1 + 0.1t)

1500/500 = 1 + 0.1t Divide both sides by 500

3 = 1 + 0.1t

3 - 1 = 0.1t Subtract 1 from both sides

2 = 0.1t

2/0.1 = t Divide both sides by 0.1

t = 20 Final answer

*Remember the unit is years for time

Therefore, it will be 20 years before I will have a total of $1500 and am able to go on my cruise.