Question

Show how you got your answer or explain it

interest earned: $84

principal: $600

interest rate 7%

time:?

Answer 1

Total = Principal × ( 1 + Rate ) ^ years

(Solved by taking logarithms)

Years = log (total / principal) / (log (1 + rate))

Years = log (684 / 600) / (log 1.07)

Years = log (1.14) / (log (1.07)

Years = 0.0569048513364726 / 0.0293837776852097

Years = 1.9366077414

Answer 2

For simple interest, the amount of interest (I) is calculated from the principal (P), the annual rate (r) and the number of years (t) using the formula

... I = P·r·t

Fill in the given numbers, and solve for t.

... 84 = 600·0.07·t . . . of course, you know that 7% = 7/100 = 0.07

... 84 = 42t . . . . . . . . simplify

... 84/42 = t = 2 . . . . divide by the coefficient of t

The time period is 2 years.