Question

How long would it take a $25,000 investment to earn $1,997.26 interest at 13.5%? In DAYS.

a) 40 days
b) 45 days
c) 50 days
d) 55 days

Answer 1

To find out how many days it takes for a 25,000 investment to earn 1,997.26 in interest at an annual rate of 13.5%, the simple interest formula I = P × R × T is used, with R adjusted to decimal form and T as a fraction of the year.

Step-by-step explanation:

To calculate the number of days it takes for a 25,000 investment to earn 1,997.26 in interest at an annual rate of 13.5%, we can use the simple interest formula, which is Interest (I) = Principal (P) × Rate (R) × Time (T). Since simple interest is generally calculated on an annual basis, we need to adjust the formula to reflect the amount of time in days. Therefore, the time will be represented as a fraction of the year. The rate should also be represented in decimal form. So, for a 13.5% interest rate, we use 0.135.