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Joe deposits $50,000.00 in an account that earns 8.3% simple interest. About how many years will it take for his account balance to earn $80,000.00 in interest?

Select the best answer from the choices provided.

About 5 years

About 10 years

About 20 years

About 25 years

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Answers (2)
  1. 25 May, 15:05
    0
    The answer is about 5 years
  2. 25 May, 15:08
    0
    T = 7.23 years (either 5 or 10, you choose)

    Equation:

    t = (1/r) (A/P - 1)

    Calculation:

    First, converting R percent to r a decimal

    r = R/100 = 8.3%/100 = 0.083 per year,

    then, solving our equation

    t = (1/0.083) ((80000/50000) - 1) = 7.23

    t = 7.23 years

    The time required to get

    a total amount, principal plus interest, of $ 80,000.00

    from simple interest on a principal of $ 50,000.00

    at an interest rate of 8.3% per year

    is 7.23 years (about 7 years 3 months).
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