Question

Dr. Jones deposited $500 into an account that ears 6% simple interest. How many years will it take for the value of the account to reach $2000

Answer 1

50 years

Explanation:

Formula for simple interest:

I = Prt

where

I = interest earned

P = principal amount deposited

r = annual interest rate

t = number of years

When the account reaches $2000, $500 is from the principal and

$2000 - $500 = $1500 is from the interest.

We use the simple interest formula to find the number of years needed to earn $1500 in interest from $500 principal at 6% interest rate.

1500 = 500 * 0.06 * t

t = 50

Answer: 50 years

Answer 2

50 years

Explanation:

Given data

Principal= $500

Rate= 6%

Amount = $2000

The simple interest expression is given as

A=P(1+rt)

Substitute

2000= 500(1+0.06*t)

open bracket

2000=500+ 30t

2000-500=30t

1500=30t

t= 1500/30

t= 50 years

Hence the time is 50 years