Question

Becky received a statement on her Certificate of Deposit showing that her investment had returned $6,336 over its life. If the Certificate of Deposit pays a simple interest rate of 4.4% and her initial investment was $16,000, how long had the money been invested?​

Answer 1

The amount of money returned as interest depends on the initial

amount, the interest rate and the number of years.

Response:

• The money has been invested for 9 years

What is simple interest and how can the duration of investment be found?

Given:

The return on investment = $6,336

Amount the Certificate of Deposit pays = 4.4% simple interest

The initial investment (the principal), P= $16,000

Required:

The duration the initial amount of money had been invested.

Solution:

Interest = Principal × Rate × Time

Which gives;

$Time = \mathbf{ \dfrac{Interest }{ Principal \times Rate}}$

Therefore;

$Length \ of \ time \ of \ the \ investment = \mathbf{ \dfrac{\ 6,336}{\ 16,000 \times 0.044(/year)}} = 9$

• The duration the money had been invested = 9 years

Learn more about simple interest here:

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