Question

Donny the Dot Dude is saving for a llama. He puts$3,000 in a savings account that earns 12% simpleannual interest. How many years it will it take forhim to have the $4,440 he needs ifhe makes no additional depositsor withdrawals?A) 4 yearsSOB) 5 yearsC) 6 yearseboD) 2 yearsх

Answer 1

The simple interest formula is:

A = P(1 + rt)

where A is the final amount, P is the princiapal, r is the annual interest rate (as a decimal), and t is time in years.

Substituting with A = $4,440, P = $3,000, and r = 0.12 (= 12/100), we get:

$\begin{gathered} 4440=3000\cdot(1+0.12\cdot t) \\ \frac{4440}{3000}=1+0.12\cdot t \\ 1.48-1=0.12\cdot t \\ \frac{0.48}{0.12}=t \\ 4\text{ years = t} \end{gathered}$