Question

You put $500 in your bank account. With an interest rate of 5%, how long will it take the account to reach $600? Use the formula: I = Prt.

Answer 1

To calculate how long it will take for a bank account with an initial deposit of $500 to reach $600 at a 5% simple interest rate, you first determine the total interest required ($100), then use the formula I = Prt to solve for time. The calculation shows that it will take 4 years for the account to reach $600.

Step-by-step explanation:

To determine how long it will take for an account to reach $600 with an initial deposit of $500 at a simple interest rate of 5%, we can use the simple interest formula I = Prt, where I is the interest, P is the principal amount, r is the rate, and t is the time in years.

First, we calculate the total interest needed for the account to reach $600:

• Total amount desired = $600
• Principal (initial amount) = $500
• Interest needed = Total amount - Principal
• Interest needed = $600 - $500 = $100

Next, we use the formula I = Prt to solve for time (t):

• I = $100
• P = $500
• r = 0.05 (5% expressed as a decimal)
• $100 = $500 × 0.05 × t
• $100 = $25t
• t = $100 / $25
• t = 4 years

Therefore, it will take 4 years for the account to reach $600.

Answer 2

4 years

5% of 500 is 25 and that goes into it 100 4 times
so the answer is 4 years