Question

You want to put $2,500 in a simple interest account. It has a 4% annual interest rate. How long must you invest that money to earn $500 in interest?

A) 1.25 years
B) 2.5 years
C) 5 years
D) 20 years

Answer 1

Answer: C) 5 years

Explanation:

Formula for the simple interest is: I = P * r * t, where: I = $500, P = $2,500, r = 0.04 and t stays for the number of the years. 500 = 2,500 * 0.04 * t; 500 = 100 * t; t = 500 : 100; t = 5.

Answer 2

Answer:c

Explanation: