Question

Your grandmother deposits $500 into a savings account for you to access when you get older. The account carries a 4% simple annual interest rate. If you want to let the balance grow until it is worth$700 , how many years must you wait?

Answer 1

Well simple interest....the formula is

I = PRT

I = interest earned (final balance - current balance) (700 - 500)
P = principal amount
R = interest rate in decimal form (4% = .04)
T = time in years...(what you want)

So we have to rearrange for T here

\[T = \frac{ I }{ PR }\]

so you can plug in the numbers from here

Answer 2

is it 10

Answer 3

Yes it is :)

Answer 4

Yes