Question

How many years will it take for 20$ to grow to 100 if the simple interest rate is 4% annually

Answer 1

The formula for simple interest is:

Total = Principal(1+ Rate x time)

You are given:

Total = $100

Principal = $20

Rate = 4%

You are asked to find the time.

Replace everything known in the formula:

100 = 20(1 +0.04 x Time)

Now solve for Time:

Divide each side by 20:

5 = 1 + 0.04 x Time

Subtract 1 from each side:

4 = 0.04 x time

Divide each side by 0.04:

Time = 4 / 0.04

Time = 100 years.