Question

Geneva wants to save $12,000 to buy a new car. She just received an $8,000 bonus and plans to invest it in an account earning 7% Annual simple interest. How long will she need to leave her money in the account to accumulate the $12,000 she needs?

Answer 1

7.14 years

Explanation:

We can use the formula for simple interest to solve this problem:

Simple Interest = Principal x Rate x Time

where the principal is the initial investment, the rate is the annual interest rate, and the time is the number of years.

We know that Geneva wants to save $12,000, and she already has $8,000 from her bonus, so she needs to earn an additional $4,000 in interest. We can use this amount as the principal in the formula.

Simple Interest = $4,000

Principal = $8,000

Rate = 0.07 (7% expressed as a decimal)

Plugging in the values, we get:

$4,000 = $8,000 x 0.07 x Time

Simplifying, we get:

Time = $4,000 / ($8,000 x 0.07)

Time = 7.14 years (rounded to the nearest hundredth)

Therefore, Geneva will need to leave her money in the account for approximately 7.14 years to accumulate the $12,000 she needs