Brittany opened an account with a deposit of $6,500.
The account earned annual simple interest of 2.5%
She did not make any additional deposits or withdrawals.
When she closed the account, the balance of the account was $9750.
How long was the account open?
25 years
15 years
20 years
10 years
20 years
The formula for simple interest is:
I = PRT
Where:
I = Interest earned
P = Principal (starting balance)
R = Annual interest rate
T = Time in years
Given:
P = $6,500
R = 2.5% or 0.025
I = $9,750 - $6,500 = $3,250
Plugging in the values:
$3,250 = $6,500 * 0.025 * T
Solving for T:
T = $3,250 / ($6,500 * 0.025)
T = $3,250 / $162.50
T = 20
Therefore, the account was open for 20 years.