You deposit $2000 in an account that earns simple interest at an annual rate of 4%. How long must you leave the money in the account to earn $500 in interest?
The simple interest formula for the accumulated balance is:
Prt = I
We are given P = 2,000, r = 0.04, and I = 500.
2000(0.04)t = 500
80t = 500
Divide each side by 80
t = 6.25 years
The simple interest formula for the accumulated balance is:
Prt = I
We are given P = 2,000, r = 0.04, and I = 500.
2000(0.04)t = 500
80t = 500
Divide each side by 80
t = 6.25 years
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