Simple interest

Question

A savings account receives 10% simple interest per year.How long would it take $150000 to gain $6000 in interest"

Answer 1

The formula for calculating simple interest (I) is :

I = P • r • t where P is the amount of money borrowed or deposited

r is the interest rate (usually written in decimal form)

t is the time measured in years

For this problem, I = 6000, P = 150000, r = 0.10

Now we can determine the tome:

I = P • r • t

6000 = 150000 • 0.10 • t

6000 = 15000 • t

6000/15000 = 15000 • t /15000

0.4 year = y

0.4 of one year is 4.8 months (0.4 • 12 months = 4.8 months)