Question

Approximately how many

years would it take for an
investment of $1,000 to grow
to $1,500 with a simple
interest rate of 8%?

Answer 1

6.25 years

(6 years 3 months)

Explanation:

Simple interest formula

A = P(1 + rt)

where:

• A = final amount
• P = principal
• r = interest rate (in decimal form)
• t = time (in years)

Given:

• A = $1,500
• P = $1,000
• r = 8% = 0.08

Substitute given values into the formula and solve for t:

⇒ 1500 = 1000(1 + 0.08t)

⇒ 1500 = 1000 + 80t

⇒ 500 = 80t

⇒ t = 6.25 years