Question

Sam is opening a saving account with $1,500 she got for her birthday. It

will collect simple interest at a rate of 4%, If Sam makes no additional
deposits or withdrawals, how long will it take Sam to earn $540 in
Interest?

Answer 1

9 years

Explanation:

Simple interest for any amount p is given by

SI = P*R*T/100

where R is the rate of interest

T is the time period in years

given

P =$1500

R = 4%

T we have to find

SI = $540

Thus, putting the given value in SI = P*R*T/100

540 = 1500*4*T/100

T = 540*100/1500*4 = 9 years

Thus, It will take 9 years for Sam to earn $540