Question

Samuel deposits $1,800 in an account that earns 12% simple annual interest. How many months will it take for Samuel's account balance to reach $2,448?
Use the simple interest formula I = prt, where I = Interest, p = Principal or amount borrowed, r = Rate, and t = Time (in years).

Answer 1

In order to use the simple interest formula, we first define the variables. The interest would be equal to Samuel's desired amount $ 2,488 minus the principal amount of $ 1,800 which is then equal to $ 688. The rate must be in decimal form which is equal to 0.12 while t is expressed in years. Substituting the values, t is equal to 3. Thus, it will take 36 months for Samuel's account balance to reach $2,448.