Question

Gloria deposited $500 into a bank account that earned 7.5% simple interest each year. She earned $225 in interest before closing the account. If no money was deposited into or withdrawn from the account, for how many years was the money in the account? Round your answer to the nearest whole year. Enter your answer in the box.

Answer 1

T = 6 years

Equation:
t = (1/r)(A/P - 1)
Calculation:
First, converting R percent to r a decimal
r = R/100 = 7.5%/100 = 0.075 per year,
then, solving our equation

t = (1/0.075)((725/500) - 1) = 6
t = 6 years

The time required to get
a total amount, principal plus interest, of $ 725.00
from simple interest on a principal of $ 500.00
at an interest rate of 7.5% per year
is 6 years.