Question

Sam opened a money-market account that pays 2% simple interest. He started the account with $7,000 and made no further deposits. When he closed the account, he had earned $420 in interest. How long did he keep his account open?

Answer 1

3 years
ar(n)=total a is the first number which is 7000 r is the common ratio which is 100%+2%=102 102 divided by 100 giving u 1.02(interest) so ar(n)=sum n is written as power.....and is the number of years so 7000*1.02(n)=(7000+420) 1.02(n)=7420/7000 1.02(n)=1.06 log10 1.02(n)=log10(1.06) ( multiply log10 with both) n=log10(1.06)/log10 (1.02) u get 2.94 which is round off to 3 so 3 years.. hope This helps :)