Question

The simple interest I on an investment of P dollars at an interest rate r for t years is given by I=Prt. Find the time it would take to earn $1400 in interest on an investment of $27,000 at a rate of 4.2%.

Answer 1

we know that

`I=Prt`

where

I is the amount in interest

P is the investment

r is the interest rate

t is the time in years

Solve for t

`t=I/(Pr)`

we have

`I=\$1,400\\ P=\$27,000\\ r=4.2\%=0.042`

substitute

`t=1,400/(27,000*0.042)=1.23\ years`

therefore

the answer is

`1.23\ years`