Question

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

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

$I=P\times R\times T$

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

$100=1000\times 0.04\times T$

$100=40T$

Divide both sides by 40.

$\dfrac{100}{40}=T$

$2.5=T$

Therefore, the required time is 2.5 years.