SOLUTION: You deposit $2000 in an account that earns simple interest at an annual rate of 4%. How long must you leave the money in the account to earn $500 in interest?

Question 994683: You deposit $2000 in an account that earns simple interest at an annual rate of 4%. How long must you leave the money in the account to earn $500 in interest?
Found 2 solutions by Boreal, stanbon:
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
P=Po{1+0.04}^n, n=years
2500/2000=(1.04)^n
1.25=(1.04)^n
ln both sides
0.223=nln(1.04)=n(0.3922)
without rounding, divide the 0.223 originally unrounded by 0.3922 unrounded.
The result is 5.69 years.
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Check.
the first year, the interest is $80, and that increases slightly each year. After 6 years, it would be $480 if the increase weren't factored in, so the answer is reasonable.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
You deposit $2000 in an account that earns simple interest at an annual rate of 4%. How long must you leave the money in the account to earn $500 in interest?
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Interest = P*r*t
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2000*0.04*t = 500
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80t = 400
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time = 6.25 years
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Cheers,
Stan H.
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