Monday After-MATH

[Goodoleboy58]

Jim Roberts visited his local bank to see how long it will take for $1,100 to amount to $1,900 at a simple interest rate of 14 percent. The time is: (Round time in years to nearest tenth)

a. 7.1 years

b. 12.3 years

c. 2.5 years

d. 5.2 years

e. None of the above

[Goodoleboy58]

no takers?

[atripes]

D. 5.2 Years

Interest = $800

$800 = $1,100*(0.14)*T

T = ($800/$1,100)/0.14 = 5.1948 years

[Porkins]

Is interest accrued monthly or annually?

Edit:

Each month's/year's interest should be factored into the calculations for subsequent month/year interest garnered.

$1100*.14=$154

$1100+$154=$1254

$1254*.14=$175.56

$1254+$175.56=$1429.56

$1429.56*.14=$200.14 (rounded)

$1429.56+$200.14=$1629.70

$1629.70*.14=$228.16 (rounded)

$1629.70+$228.16=$1857.86

The answer would be "None of the Above" as the person in question would have reached the $1800 (and then some) mark in just under 4 months/years.

[atripes]

I = P*r*t

I = Amount of interest earned (Cash earned over the period, $800 in this question)

P = Principle investment (starting amount, $1,100)

r = Rate of return (14%)

t = Time