Question

Jerry currently has an account balance of $1,109.80. His initial deposit on the account was $775 and it earned 2.7% simple interest. How long has Jerry held the account?

Answer 1

First lets find what the interest payments on the principal of $775 dollars are.

775 x 0.027 = 20.925

That means every interest payment period we get $20.925

Now to figure out how long it took to get to 1109.80, we have to consider the initial amount of 775 and add all the interest payments that have been accumulated from initial investment of 775 until the value reached 1109.80.

1109.80 = 775 + 20.925x

x represents the number of periods it takes to arrive to 1109.80

When we solve, we get x = 16, so if the 2.7% is annual, it would take 16 years.


Hope this helps. Let me know if you have any questions.

Answer 2

thank you:)