You want to save $20,000 to buy a new boat. You deposit $12,500 in an account earning 6.5% simple interest. After how long will you have enough money in the account to purchase the boat?

Question

Priscilla Hayden

Mathematics

10 June, 05:40

You want to save $20,000 to buy a new boat. You deposit $12,500 in an account earning 6.5% simple interest. After how long will you have enough money in the account to purchase the boat?

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Answers (1)

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Leonardo Davila · Answer 1

9 years

Step-by-step explanation:

S. I = PRT/100

now since you're aiming at $20,000 and what you deposited was $12,500, this means that you're looking to raise 20,000-12,500 = $7,500 simple interest.

Hence, S. I = 7,500

P = 12,500

R = 6.5%

T = ?

Substituting these values into the simple interest equation:

7,500 = (12,500 * 6.5 * T) / 100

T = (100 * 7,500) / (12,500 * 6.5)

T = 750000/81,250 = 9.23 approximately 9 years