Final answer:
To calculate the time for money to triple at a simple interest rate of 8%, we use the formula I = PRT and solve for T with I equal to twice the principal. By setting up the equation 2P = PRT, we find that T equals 25 years.
Step-by-step explanation:
To determine the length of time required for money to triple at a simple interest rate, we can use the formula for simple interest which is I = PRT, where I is the interest, P is the principal amount (initial amount of money), R is the rate of interest per year, and T is the time in years. To triple the money, the interest earned must be twice the principal (since Principal + 2 x Principal = 3 x Principal).
Therefore, we can set up the equation as follows:
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- I = 2P (because to triple, you need twice the initial amount as interest)
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- I = PRT
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- 2P = P x 0.08 x T (since R = 8% or 0.08)
Cancelling the P from both sides, we are left with:
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- 2 = 0.08T
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- T = 2 / 0.08
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- T = 25 years
So, the time required for the money to triple in value at a simple interest rate of 8% per year is 25 years.