Question

Sam earned $40 on his investment of $400. He earned 5% interest on his investment. How long did Sam leave his money in the bank?

Answer 1

2yrs

Explanation:

Given parameters:

Amount of interest earned = $40

Principal = $400

Interest rate = 5%

Unknown:

Time taken for the money to be in bank = ?

Solution:

The formula for interest is given as:

I =
`(PRT)/(100)`

Where I is the interest

P is the principal

R is the rate

T is the time

So;

100I = PRT

T =
`(100I )/(PR)` =
`(100 x 40)/(400 x 5)` = 2yrs