Question

Robby invested $18,400 at 7% interest. He earned $9016 interest at the end of x years. What is the value of x? A. 10 B. 9 C. 8 D. 7

Answer 1

This is an example of a Simple interest. We have an annual rate 7% ( or r=0.07). A=18,400 + 9,016 =$27,416. The formula for calculating the Simple interest: A=P*(1+r*x), 27,416=18,400*(1+0.07x), 1+0.07x=27,416:18,400, 1+0.07x=1.49, 0.07x=1.49-1, 0.07x=0.49, x=0.49:0.07, t = 7. Answer: D) x=7 years