Question

Colton wants to invest $8,400.00 in a savings account that pays 7.01% simple interest. How long will it take for thisinvestment to reach a value of $13,300.00?Round your answer to the nearest tenth of a year.

Answer 1

Simple interest:

`A=P(1+rt)`

Where:

`\begin{gathered} A=\text{ final amount} \\ P=\text{ initial principal amount} \\ r=\text{ Annual amount} \\ t=\text{ time (in year)} \end{gathered}`

So:

`\begin{gathered} A=P(1+rt) \\ 13300=8400(1+((7.01)/(100))t) \\ (13300)/(8400)=1+0.0701t \\ 1.5833=1+0.0701t \\ 0.0701t=1.5833-1 \\ t=(0.5833)/(0.0701) \\ t=8.32 \end{gathered}`

time is 8.33 year