Question

Bart wants to deposit his piggy bank savings into a savings account. If he deposits $325. 76, how many whole years will it take, at 2% simple

Interest, for that amount to grow to $400. 00?


A. 12 years

B. 4 years

C. 16 years

D. 8 years

Answer 1

To calculate how many years it will take for Bart's savings to grow to $400 with a 2% simple interest rate, we can use the formula: Final amount = Principal + (Principal x Interest rate x Time). By rearranging the equation and calculating the expression, we find that it will take approximately 4 years.

Step-by-step explanation:

To calculate how many years it will take for Bart's savings to grow to $400, we can use the formula for simple interest:

Final amount = Principal + (Principal x Interest rate x Time)

Given that Bart's initial deposit is $325.76 and the interest rate is 2%, we can plug in the known values:

$400 = $325.76 + ($325.76 x 0.02 x Time)

To find the value of Time, we can rearrange the equation:

Time = ($400 - $325.76) / ($325.76 x 0.02)

Calculating this expression will give us the value of Time in years. After performing the calculations, we find that Time is approximately 4 years. Therefore, the correct answer is B. 4 years.

Answer 2

Step-by-step explanation:

Compounding interest :

Future value of money = Present value * (1+ r)^N

r - interest rate

n - number of period

In our example, Present value = 325.76, FV = 400, r = 2%, and we need to find N

by solving that we can find it that N is equal to 10.3675

Simple interest :

400 - 325.76 = 74.26$ we need to increase

325.76*2% = 6.5152$ each year

74.26 / 6.5152 = 11.3949

as a whole year = 12years