Question

$400 interest is earned on a principal of $2,000 at a simple interest rate of 5% interest per year. For how many years was the principal invested?

Answer 1

4 years

Explanation:

Given data

Simple interest= $400

Principal= $2000

Rate= 5%

The simple interest formula is given as

SI=PRT/100

substitute and solve for T

400=2000*5*T/100

cross multiply

400*100= 10000*T

40000=10000T

T= 40000/10000

T= 4 years

Hence the time taken is 4 years