Question

You put $2000 in an account with simple interest rate 1.5%. How long does it take the account to earn $60?

Answer 1

2 years

Explanation:

Simple interest is calculated using the formula: I = prt, where I = the amount of interest earned, p = principal amount, r = rate and t = time. In this case, you know the principal = $2000, the rate = 1.5% or 0.015 and the I = $60, so you are solving for time 't':

I = prt or $60 = $2000(0.015)t

Simplify: 60 = 30t

Divide both sides by 30: 60/30 = 30t/30 or t = 2 years.