Question

You deposit $5000 in an account earning 7.5% simple interest per year. How long will it take for the balance of the account to be $6500?

Answer 1

4 years

Explanation:

Given data

Principal P=$5000

Rate r= 7.5%

Final amount A=$6500

The expression for the simple interest is

A=P(1+rt)

Substitute

6500=5000(1+0.075*t)

6500=5000+375t

6500-5000=375t

1500=375t

t= 1500/375

t= 4 years

Hence, the time is 4 years