Question

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Edward opens up a savings account with $250. The bank gives him an interest rate of 2.8% per year (simple interest). About long will it take for Edward to double his money?
(SHOW WORK!!)

Equation:________________

Answer:_________________​

Answer 1

Equation: 250(1 + 0.028t) = 500

Answer: 36 years

Explanation:

Simple interest formula

A = P(1 + rt)

where:

• A = final amount
• P = principal
• r = interest rate (in decimal form)
• t = time (in years)

Given:

• A = double $250 = $500
• P = $250
• r = 2.8% = 0.028

Substitute given values into the formula and solve for t:

250(1 + 0.028t) = 500

⇒ 250 +7t = 500

⇒ 7t = 250

⇒ t = 250/7

⇒ t = 35.71428571...

So it will take approximately 36 years for Edward to double his money.

Answer 2

Explanation:

The interest I per t years is 2.8% of invested amount P

• I = Prt

Let the interest amount is same as invested amount, then our equation is

• P = Prt or
• 1 = rt or
• 1 = 0.028t 2.8% converted to 0.0028

Find the value of t

• t = 1/0.028
• t = 35.71 or roughly 36 years