Question 607688

{{{A=P+Prt}}} Start with the <a href=http://www.mathwords.com/s/simple_interest.htm>simple interest formula</a>.



{{{3300=2500+2500*0.16*t}}} Plug in {{{A=3300}}}, {{{P=2500}}}, and {{{r=0.16}}} (the decimal equivalent of 16%).



{{{3300=2500+400*t}}} Multiply {{{2500}}} and {{{0.16}}} to get {{{400}}}.



{{{3300-2500=400*t}}} Subtract {{{2500}}} from both sides.



{{{800=400*t}}} Combine like terms.



{{{800/400=t}}} Divide both sides by {{{400}}} to isolate 't'.



{{{2=t}}} Divide.



{{{t=2}}} Rearrange the equation.



So it will take 2 years (or <font color="red">24 months</font>) for an investment of $2500 to grow to $3300 with an interest rate of 16% (using simple interest).

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