Question

You deposit $3500 in an account that earns 4% simple interest. How long will you have to leave the money in the account to earn $350 interest?

Answer 1

To solve this question let's remember the simple interest formula

I=Prt

I is the Simple Interest

P the Principal

r the Annual Interest Rate in years (in decimal form)

and t the Time in years

Now from the problem we got

I=350, r=4%, P=3500

Now we solve the equation for t

t=I/Pr

Replacing

`(350)/(3500\cdot0.04)`

Solving we get 2.5

Answer: So we conclude that we need 2.5 years to earn $350 in interest