Question

You deposit $5000 in an account earning 7. 5% simple interest. How long will it take for the balance of the account to be $6500?.

Answer 1

The number of years will it take for the balance of the account to be $6500 with simple interest is 4 years.

What is simple interest?

Simple interest is the amount charged on the principal amount with a fixed rate of interest for a time period. Simple interest calculated only on the principal amount.

The formula for the simple interest can be given as,

$I=\dfrac{P\times r\times t}{100}$

Here, (I) is the interest amount  on the principal amount of (P) with the rate of (r) in the time period of (t).

The principal amount deposited in the account is $5000 and the final amount is $6500. Thus, the interest rate will be,

$I=6500-5000\\I=1500$

Suppose it took t years to get $1500 interest in the account. Therefore, put the values  in the above formula as,

$6500=\dfrac{5000\times 7.5\times t}{100}$

Solve it further for t as,

$1500={50\times 7.5\times t}\\t=\dfrac{1500}{50\times7.5}\\t=4\rm years$

Hence, the number of years will it take for the balance of the account to be $6500 with simple interest is 4 years.

Learn more about the simple interest here;

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