You have $4300 that you invest at 5% simple interest. How long will it take for your balance to reach $7525?
A) 14 years
B) 15 years
C) 16 years
D) 17 years

Question

Quizplus · Accepted Answer

The formula for simple interest is $I = P \times r \times t$, where $I$ is the interest earned, $P$ is the principal amount (initial investment), $r$ is the annual interest rate (in decimal form), and $t$ is the time in years. Here, you want the total amount ($A$) to be $7525, where $A = P + I$, and you're given $P = $4300$ and $r = 5\% = 0.05$. The interest earned ($I$) would be $A - P = $7525 - $4300 = $3225$. Plugging into the formula, $3225 = 4300 \times 0.05 \times t$. Solving for $t$ gives $t = 3225 / (4300 \times 0.05) = 15$ years.

You Have $4300 That You Invest at 5% Simple Interest