Question

You want to save $10,000 to buy a new car. You deposit $6500 in an account earning 7.5% simple interest. After how long will you have enough money in the account to purchase the car? Round your answer to the nearest whole number

Answer 1

If you say it's simple interest, then it 7.5% of 6500 added every year instead of 7.5% of the previous year added for the next year, right? So,

Answer: 8 years

7.5/100 x 6500 = 487.5
(10,000 - 6500) / 487.5
= 8 (rounded up to the nearest whole number)

Therefore, it will take 8 years