Question

Morgan deposited a lump sum of $8,000 into an account earning simple interest at an APR of 1.3%. If he earned $1,248 in interest, how many years did he leave his money invested in this account? Enter your answer as a whole number, no words.

Answer 1

To calculate the years of investment, the formula Time = Interest / (Principal × Rate) is used. In this case, Morgan invested his $8,000 for 12 years to earn $1,248 in simple interest at an APR of 1.3%. Morgan left his money invested for approximately 12 years.

Step-by-step explanation:

To find the number of years Morgan left his money invested, we can use the formula for simple interest:

Interest = Principal x Rate x Time

Given that Morgan earned $1,248 in interest and the principal was $8,000, and the interest rate was 1.3%, we can substitute these values into the formula:

$1,248 = $8,000 x 0.013 x Time

Simplifying the equation, we have:

Time = $1,248 / ($8,000 x 0.013)

Calculating this, we find that Morgan left his money invested for approximately 12 years.