If 10,000 is invested at 4.8% simple interest, how long will it take for the account balance to grow to 11,200.
Solve the equation:
11200=10000(1+0.048*(how long))
2 years and 6 months
To determine how long it will take for the account balance to grow to $11,200, we need to use the formula for simple interest:
Interest = Principal × Rate × Time
Where:
- Principal is the initial amount invested ($10,000 in this case)
- Rate is the annual interest rate (4.8% = 0.048 in decimal form)
- Time is the number of years
We can rearrange the formula to solve for Time:
Time = Interest / (Principal × Rate)
First, let's calculate the interest earned by the account:
Interest = $11,200 - $10,000 = $1,200
Now we can substitute the values into the formula:
Time = $1,200 / ($10,000 × 0.048)
Calculating the right side of the equation:
Time = $1,200 / $480
Simplifying the expression:
Time = 2.5 years
Therefore, it will take approximately 2.5 years for the account balance to grow to $11,200 with a 4.8% simple interest rate.