Question

You deposit $1,500 in an account earning 2.75% simple interest. How long will it take for the

balance of the account to be $1,995.

Answer 1

12 years if interest is paid yearly

12 months if interest is paid monthly

Explanation:

2.75% of $1500 is $41.25 interest per period

$1995-$1500 = $495 total interest

$495 ÷ $41.25 = 12 periods

Therefore it takes 12 interest periods to reach $1995, so the answer is 12 months or 12 years depending on how often interest is paid.