Question

John invested $4,500 at 5.5% annual simple interest. His maturity value of his investment was $5,545. How long did John invest the money? Round to the hundredth.

Answer 1

John invested the money at simple interest for 4.22 years.

We have,

Invested amount = $ 4500

Rate of interest = 5.5 %

Time = t years

Maturity value = $ 5545

So,

Total interest earned =  $ 5545 - $ 4500 = $ 1045

And,

Simple interest = (Principal × Rate × Time ) / 100

So, Using the mentioned formula,

1045 = ( 4500 × 5.5 × t ) /100

1045 = 45 × 5.5 × t

⇒

t = (1045) / (45 × 5.5)

⇒ t = 4.22 years

Therefore, John invested the money at simple interest for 4.22 years.

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