Final answer:
Sara needs to keep $1,300 in her savings account at a 3% simple interest rate for 6 years to accumulate enough interest to reach the $1,534 required for the down payment.
Step-by-step explanation:
The question presents a scenario where Sara needs to calculate how long she must keep her money in a savings account to reach a target amount for the down payment on a house. Sara has $1,300 in her savings account and needs to accumulate an additional $234 ($1,534 down payment minus her current $1,300) using the simple interest formula which is Interest = Principal x Rate x Time (I = PRT). The interest rate is given as 3% (or 0.03 when expressed as a decimal).
To find out how long it will take Sara to reach her goal, we can rearrange the formula to solve for Time (T) as follows: T = I / (P x R). The interest Sara needs, I, is $234, her principal, P, is $1,300, and her interest rate, R, is 0.03. Plugging in the values, we get:
- T = $234 / ($1,300 x 0.03)
- T = $234 / $39
- T = 6 years
Therefore, Sara needs to keep her savings in the account for 6 years to have enough for her down payment.