Question

Susan deposits $1,200 in an account that earns 8% simple interest annually. In how many months will Susan's account balance reach $1,344? (Use the simple interest formula I=prt, where I = interest, p = principal or amount borrowed, r = rate, and t = time in years.)

Answer 1

You need to calculate the interest between the initial amount ($1200) and the final amount ($1344). The difference is $144, this is the interest that you need to gain.



`I = prt`


`144 = 1200 * 0.08 * t`



`144 = 96t`


`t = 1.5 years`

Convert 1.5 years into months


`1.5 years * 12 months/year = 18 months`

Hope you understand