Question

A man invests $16 800 in a saving plan that pays simple interest at a rate of 5%. Find the time taken for his investment to grow to $18 900.

Please explain

Answer 1

• 2.5 years

Explanation:

Given

• Investment P = $16800
• Interest rate r = 5% = 0.05
• Final amount A = $18900
• Time t = ?

Use the formula

• A = P(1 + rt), where A - final amount, P - investment, r- interest rate, t- time

Substitute the given numbers and solve for t:

• 18900 = 16800( 1 + 0.05t)
• 1 + 0.05t = 18900/16800
• 1 + 0.05t = 1.125
• 0,05t = 0.125
• t = 0.125/0.05
• t = 2.5 years