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4 January, 04:54

Jodi is trying to save money for a down payment on a house. She invests $6,000 into an account paying 5.5% simple interest. For how long must she save if she needs $7,300 for the down payment? A. 2 years B. 3 years C. 4 years D. 5 years

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  1. 4 January, 05:05
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    You would need to set up a formula here for simple interest (non-compounding)

    interest = principle X interest X term

    the amount of interest earned is the future value (ending value) minus the previous value or 7,300-6000 = 1,300 in interest

    Then we need to find out how many years it would take to earn that amount

    1,300 = (6,000 *.055) * x

    1,300=330x

    then isolate x 1,300/330=x

    x = 3.9 or about 4 years
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