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Teresa deposits $4,000 in an account earning 7% simple interest annually. How long will it be before the total amount is $6,500?

User Sfritter
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1 Answer

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Final answer:

To find how long it will take for the total amount to reach $6,500, we can use the formula for simple interest. In this case, it will take approximately 8.93 years (or 8 years and 11 months) for the total amount to reach $6,500.

Step-by-step explanation:

To calculate how long it will take for the total amount in the account to reach $6,500, we can use the formula for simple interest: A = P(1 + rt), where A is the total amount, P is the principal amount, r is the interest rate, and t is the time in years. In this case, we have A = $6,500, P = $4,000, and r = 7%. We can solve for t:

$6,500 = $4,000(1 + 0.07t)

Dividing both sides of the equation by $4,000, we get:

1.625 = 1 + 0.07t

Subtracting 1 from both sides of the equation, we get:

0.625 = 0.07t

Dividing both sides of the equation by 0.07, we get:

t = 0.625 / 0.07

Therefore, it will take approximately 8.93 years (or 8 years and 11 months) for the total amount to reach $6,500.

User Jrivam
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