Question

You deposit $5000 in an account that earns 5% simple interest. How long will it take to earn $800 in interest?

Answer 1

3.2 years

Explanation:

You are going to want to use the simple interest formula for this:

`t=(I)/(Pr)`

I = interest amount

P = principal amount

r = interest rate (decimal)

First, change 5% into a decimal:

5% ->
`(5)/(100)` -> 0.05

Now, lets plug the values into the equation:

`t=(800)/((5,000)(0.05))`

`t=3.2`

It will take 3.2 years to earn $800 in interest.