Question

Tami earned $20.64 in simple interest by investing a principal of $400 in a Treasury bill.
If the interest rate was 1.72%/a, for how many years did she have her investment?

Answer 1

The number of years she had her investment is after 3 years

How to determine the years of investment?

From the question, the given parameters are:

• Principal Amount, P = $400
• Interest Rate, r = 1.72%
• Simple Interest, I = $20.64

The number of years (T) is calculated from the following simple interest formula

I = PRT

Substitute the given parameters in the above equation

20.64 = 400 * 1.72% * t

Express 1.72% as decimal without percentage

20.64 = 400 * 0.0172 * t

Evaluate the product

20.64 = 6.88 * t

Divide both sides by 6.88

20.64/6.88 = 6.88/6.88 * t

Evaluate the quotient

3 = t

Rewrite the equation as

t = 3

This means that she had her investment after 3 years

Hence, the number of years she had her investment is after 3 years

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