Question

Find the number of years it would take for $1200 to earn simple interest of $324 at an annual interest rate of 6% per year

Answer 1

ANSWER

It would take 45 good years

EXPLANATION

We calculate simple interest using the formula,

$I=\frac{P\times T\times R}{100}$

From the question,

$I=324$ dollars

$R=6$%

and

$P=120$ dollars

We substitute into the above formula

$324=\frac{120\times T\times 6}{100}$

$324=\frac{720\times T}{100}$

$324\times100=720\times T$

$\frac{324\times100}{720}=T$

$\frac{324\times10}{72}=T$

$45=T$

Therefore it would take 45 years.