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If a couple invests $5000 in an account that that earns a 3% interest rate, how long will they need to invest it to earn $1200 in interest?

1 Answer

Nov 14, 2016

$8 years$ $\color(indianred)(8\text( years))$

Explanation:

Apply formula $I = P r t$ $I=Prt$
$I$ $I$ is interest, $P$ $P$ is principal/original, $r$ $r$ is interest rate and $t$ $t$ is time.

Here, we have:
$I = 1200$ $I=1200$
$P = 5000$ $P=5000$
$r = 0.03$ $r=0.03$

$1200 = (5000) (0.03) (t)$ $1200=(5000)(0.03)(t)$
The question wants you to find $t$ $t$ .

Isolating said variable (you may need to use a calculator):
$\frac{1200}{5000 \times 0.03} = t, t = 8$ $1200/(5000\times0.03)=t, t=8$

$You need 8 years to earn $ 1200 in interest.$ $\text(You need )\color(red)(8)\text( years to earn )$1200\text( in interest.)$

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