Question

If $84 interest was earned on $600 principal at a

7% interest rate, how long was the money in the account?

Answer 1

The time is 2 years

Explanation:

we know that

The simple interest formula is equal to

A=P(1+rt)

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest

t is Number of Time Periods

in this problem we have

t= ? years

P= $600

A= $600 + $84 = $684

r = 0.07

substitute in the formula above

$684 = $600(1+(0.07)t)

solve for t

t = [(684/600) - 1]/0.07 = 2 years