Question

A man invests $ 16800 in savings plan that pays simple interest at a rate of 5% per annum. Find the Tim’s taken for his investment to grow to $18900

Answer 1

2.5 years

Explanation:

The given amount invested, which is the principal, P = $16,800

The simple interest rate, R = 5% per annum

The intended total value of the investment, A = $18,900

The simple interest on the principal, I = A - P

∴ I = $18,900 - $16,800 = $2,100

The formula for the simple interest, I, is given as follows;

`I = (P * R * T)/(100)`

Therefore, we have;

`T = (I * 100)/(P * R)`

Plugging in the values, gives;

`T = (2,100 * 100)/(16,800 * 5) =2.5`

The time it will take the investment to grow to $18,900 is T = 2.5 years