Question

Kira opened a savings account with $9000 and was paid simple interest at an annual rate of 3%. When Kira closed the account, she was paid $1620 in

interest. How long was the account open for, in years?
If necessary, refer to the list of financial formulas.

Answer 1

5.6 years

Explanation:

N = A (1 + increase) ^n

Where N is future amount, A is initial amount, increase is percentage increase/decrease, n is number of mins/hours/days/months/years.

if the amount of interest was 1620, then she had a total of 9000 + 1620

= 10 620.

10 620 = 9000 (1 + 0.03)^n

(1 + 0.03)^n = 10620/9000 = 1.18.

take logs for both sides:

log (1.03)^n = log 1.18

n log (1.03) = log 1.18

n = ( log 1.18)/ log (1.03)

= 5.6 years