Question

Keith opened a savings account with $2000 and was paid simple interest at an annual rate of 5% . When Keith closed the account, he was paid $300 in interest. How long was the account open for, in years?

Answer 1

The Solution:

The correct answer is 3 years.

The formula for calculating Simple Interest is

`\text{ S.I=}(PRT)/(100)`

In this case,

`\begin{gathered} \text{ S.I= simple interest= \$300} \\ P=\text{ principle = \$2000} \\ R=\text{ rate per annum =5\%} \\ T=\text{ Time(in years)}=\text{?} \end{gathered}`

To find the number of years Keith operated the Savings Account, we shall substitute these values in the above formula.

`\begin{gathered} 300=(2000*5* T)/(100) \\ \\ 300=20*5* T \\ \\ 300=100* T \end{gathered}`

Dividing both sides by 100, we get

`\begin{gathered} (300)/(100)=(100* T)/(100) \\ \\ 3=T \\ T=3\text{ years} \end{gathered}`

Thus, Keith operated the savings account for 3 years.