Question

You deposit $2000 and account that earns simple interest an annual rate of 4% how long must you leave the money in the account to warn $500 in interest?

Answer 1

time = 6.25 years

Explanation:

To calculate the simple interest earned, we can use the following formula:

`\boxed{I = (Prt)/(100)}`,

where:

I = simple interest ($500)

P = principal amount ($2000)

r = interest rate (5%)

t = time (? years)

To calculate the amount of time the money must be left, we have to substitute the given values into the equation, and solve for t:

`500 = (2000 * 4 * t)/(100)`

⇒
`500 * 100 = 8000t` [Multiplying both sides by 100]

⇒
`50000 = 8000t`

⇒
`t = (50000)/(8000)`

⇒
`t = \bf 6.25 \ \mathrm{\bf {years}}`

Therefore, the money must be left in the account for 6.25 years to earn $500 interest.