Question

You deposit $5000 in an account earning 7.5% simple interest. How long will it take for the balance of the account to be $6500?

Answer 1

Since this is a problem of simple interest, then the interest earned will be based always on the principal amount which is 5000. So assuming that, lets also assume that the duration to get interest will be in years since that is the most commonly used duration anyway. So first, let's multiply 5000 with 0.075 to get the interest for the first year. So we will have 375. This means that we will be getting 375 interest every year. We can do trial an error method to get the number of years that will yield us to 6500. Through that, I was able to get 4 years. So 4 times 375 equals  1500 plus the original balance of 5000. It will take 4 years before your balance reaches 6500.