Final answer:
By using the simple interest formula I = PRT and rearranging it to solve for T, it's determined that it took approximately 10 years for the investment club to earn $1200 from a $5000 investment at a 2.5% interest rate.
Step-by-step explanation:
To determine how many years it took for an investment club to earn $1200 in interest from a $5000 investment at a 2.5% interest rate, we will use the formula for compound interest. However, since the question doesn't specify whether the interest is compounded annually, we'll assume simple interest to calculate the number of years. The simple interest formula is I = PRT, where I is the interest earned, P is the principal amount, R is the interest rate, and T is the time in years. Rearranging the formula to solve for T, we get T = I / (PR).
Here's the calculation:
- P = $5000
- R = 2.5% or 0.025 (as a decimal)
- I = $1200
- T = $1200 / ($5000 × 0.025)
- T = $1200 / $125
- T = 9.6 years
Therefore, it took approximately 10 years for the $5000 investment to earn $1200 in interest.