Question

You deposit $2000 in an account that earns simple interest at an annual rate of 4%. How long must you leave the money in the account to earn $500 in interest?

Answer 1

50 days
Hope this helped

Answer 2

To earn $500 in interest at a 4% annual rate, you need to leave $2000 in the account for approximately 6.25 years.

The formula for simple interest is given by:

`\[ I = P * r * t \]`

Where:

- I is the interest earned,

- P is the principal amount (initial deposit),

- r is the annual interest rate (expressed as a decimal), and

- t is the time the money is invested or borrowed in years.

In this case, you want to find t, so rearrange the formula to solve for t:

`\[ t = (I)/(P * r) \]`

Given that P = $2000, r = 0.04 (4% as a decimal), and I = $500, plug these values into the formula:

`\[ t = (500)/(2000 * 0.04) \]`

Calculate the result to find out how long you must leave the money in the account to earn $500 in interest.

`\[ t = (500)/(2000 * 0.04) \]\[ t = (500)/(80) \]\[ t = 6.25 \]`

Therefore, you must leave the money in the account for approximately 6.25 years to earn $500 in interest at a simple annual rate of 4%.