Question

Jodie invests $12,000 in a savings account that pays 2% simple interest. How many years will it take for the account to grow to $13,200, if he makes no withdrawals or deposits? (Hint, use the formula for simple interest: I=prt but first, determine what I is (double hint, it is not $13,200))

A 13 years

B 7 years

C 12 years

D 5 years

Answer 1

5 years

Explanation:

Step one:

Given data

P=$12,000

Rate= 2%

A= $13200

Required

The time T

Step two:

We know that

SI= A-P= 13200-12,000

SI=$1200

SI= PRT/100

substitute

1200= 12,000*2*T/100

cross multiply

1200*100= 24000T

divide both sides by 24000

T= 120000/24000

T= 5 years