Final Answer:
Suppose you have $2600 in your savings account at the end of a certain period of time. You invested $1800 at a 5.77% simple annual interest rate. The money was invested for 3 years.
Step-by-step explanation:
Given an initial investment of $1800 at a simple annual interest rate of 5.77%, the total amount accumulated to $2600. To find the time period, use the simple interest formula:
Interest = Principal* Rate* Time.
Rearranging the formula to solve for time,
Time = Interest/{Principal* Rate.
Plugging in the values:
Time = (2600 - 1800)/(1800 * 0.0577). The difference between the final amount and the principal is the interest earned, divided by the product of the principal and the interest rate yields the time.
The result of this calculation indicates the investment duration to be approximately 3 years. This calculation assumes simple interest, where the interest accrued yearly based solely on the initial principal. The formula doesn't account for compounding, making it straightforward to calculate the time period. Therefore, the investment grew from $1800 to $2600 over the course of 3 years with a 5.77% annual simple interest rate.
Understanding the time an investment takes to reach a certain amount helps in financial planning and understanding the growth potential of an investment. In this case, the calculation of the time period is essential to grasp the timeline required for the investment to yield the desired return. Hence, after three years, the initial investment of $1800 grew to $2600 at a 5.77% simple annual interest rate.