Question

Ben makes a deposit of $1,200 into a savings account. The bank calculates simple interest annually at a rate of 6%. Interest is added every year on the anniversary of the initial deposit. How many years must Ben wait before his investment exceeds $1,500? Give your answer in years.

Answer 1

Answer:

Ben must wait more than 4.2 years

Step-by-step explanation:

step 1

we know that

The simple interest formula is equal to

$A=P(1+rt)$

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest  

t is Number of Time Periods

in this problem we have

$t=?\ years\\ P=\ 1,200\\r=6\%=6/100=0.06\\A>\ 1,500$

substitute the values

$1,200(1+0.06t)>1,500$

Solve for t

Divide by 1,200 both sides

$(1+0.06t)>1.25$

Subtract 1 both sides

$0.06t>1.25-1$

$0.06t>0.25$

Divide by 0.06 both sides

$t>4.2\ years$

therefore

Ben must wait more than 4.2 years