Question

If Sonja deposits $1,000 into a savings account at 4% simple interest, how long will it

take her to earn $100 in interest? (I = PRT)

Answer 1

Given:

Principal (P)= $1,000

Rate of interest (R)= 4% = 0.04

Simple interest (I)= $100

To find:

The time for which she deposits $1000 into a savings account at 4% simple interest.

Solution:

The formula for simple interest is

`I=P* R* T`

On substituting P=1000, R=0.04 and I=100 in the above formula, we get

`100=1000* 0.04* T`

`100=40T`

Divide both sides by 40.

`(100)/(40)=T`

`2.5=T`

Therefore, the required time is 2.5 years.