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Financing Word Problem - HELP!

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1 Answer

The formula for simple interest is I = PRT. Interest equals principle times rate times time.
$1500 is the initial investment so that would be your principle.
$32.50 is the interest that was earned so that would be the I in the equation.
5.5% is the rate, but you would need to take it out of percentage format, which means moving the decimal two places to the left because it is a percentage out of 100 (100 has two zeroes).
 
Your equation should look like:
 
32.50 = 1500*.055*T (t for time since that is what they are asking for). Then you would solve for T.

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