Question

You want to put $2,500 in a simple interest account. It has a 4% annual interest rate. How long must you invest that money to earn $500 in interest?

Answer 1

It will take you 5 years.

Explanation:

We have to find how long must someone invest $2,500 in a simple interest to earn $500 at at a 4% annual interest rate. Formula for the simple interest is: I = P * r * t, where: I = $500, P = $2,500, r = 0.04 and t stays for the number of the years. 500 = 2,500 * 0.04 * t; 500 = 100 * t; t = 500 : 100; t = 5. Answer: 5 years.

Hope this helped!

Answer 2

I=PRT
I=interset
P=amount put in
R=rate in decimal
T=time in years


given
I=500
P=2500
R=4%=0.04
T=?


500=2500(0.04)?
500=100?
divide both sides by 100
5=?
5 years