Question 1002717: 2.)How long will it take to earn $500 simple interest, investing $8,500 at 4.25% APR?
Answer by fcabanski(1391)   (Show Source):
You can put this solution on YOUR website! There's a simple formula for simple interest: I = prt.
I is the interest earned. In this case it's $500.
p is the principal, the amount at the beginning, the amount saved. In this case its $8500.
r is the interest rate. This is generally the %/100. In this case it's 4.25 / 100 =.0425.
t is the amount of time. It's expressed in the same time frame as the interest. In this case, the interest is yearly (APR), so t will be in years. t is the unknown or what we want to find.
Plug in the numbers:
$500 = $8500*.0425 * t
$500 = 361.25*t
500/361.25 = t = 1.384 years. That's a little more than 1 year and 4 months.
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