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Situation:Holly wants to save money for anemergency. Holly invests $1,000 in anaccount that pays an interest rate of6.25%

User Frexuz
by
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1 Answer

4 votes

Given data:

Amount of money invested, P = $1000

Interest rate, r = 0.0625

Total money in the account, A = 5500

Now, to find the years use simple interest rate formula that is


A=P(1+rt)

Therefore, t will become


t\text{ = (A/P}-1\text{)/r}

Putting the values we get,


t=((5500)/(1000)-1)\text{ / 0.0625}
\begin{gathered} t=(5.5-1)\text{ / 0.0625} \\ t=(4.5)/(0.0625) \\ t=72 \end{gathered}

Thus, it will take 72 years for the account to reach 5500.

User Rhettg
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