Question

You put $1,500 in an account. The account earns $52.50 simple interest at an annual rate of 0.7%. How long does it take to earn simple interest?

Answer 1

To find how long it takes to earn simple interest, we can rearrange the simple interest formula. By substituting the given values into the formula, we can solve for the time it takes to earn the given amount of interest. In this case, it takes 5 years to earn $52.50 in simple interest.

Step-by-step explanation:

To find how long it takes to earn simple interest, we can rearrange the simple interest formula. The formula for simple interest is: I = P * r * t, where I is the interest, P is the principal (the initial amount), r is the interest rate, and t is the time.

In this example, we are given the principal P ($1,500), the interest I ($52.50), and the interest rate r (0.7%). We can substitute these values into the formula and solve for t:

52.50 = 1,500 * 0.007 * t

Simplifying the equation:

52.50 = 10.50 * t

Dividing both sides by 10.50:

t = 52.50 / 10.50

t = 5

So, it takes 5 years to earn $52.50 in simple interest.