Question

jackson inherited $5000 and wants to invest it for a few years so he can buy a used car. the best annual simple interest rate that he can find is 5.25% interest added every year on the anniversary of the initial deposit. how many years must he wait before his investment exceeds $8500

Answer 1

About 13 years.

Explanation:

5000 x 5.25% = $262.5

This means every year he will make $262.5 off interest.

Then to calculate how many years it will take him to get to $8500:

(8500-5000) / 262.5 = 13.33 years