Question

You want to put $2,500 in a simple interest account. It has a 4% annual interest rate. How long will it take you to earn $200 in interest?

Answer 1

2 years.

Explanation:

Because this is simple interest, the money will earn the same amount of money each year: 4% of $2500.

`0.04xx2500 = 100`

4% of 2500 is 100, so...

`$200÷$100 " Per Year" = 2 "Years"`