You want to save $20,000 to buy a new boat. You deposit $12,500 in an account earning 6.5% simple interest. After how long will you have enough money in the account to purchase the boat? Round your answer to the nearest whole number.
"I'm thinking of a fraction that is equivalent to 3/9 and has a denominator of 3." What fraction is Roberto thinking of? Enter the numerator in the blank space below
To find out how long it will take to have enough money in the account to purchase the boat, we can use the formula for simple interest:
I = P * r * t
where:
I = interest earned
P = principal (initial deposit or amount)
r = interest rate (in decimal form)
t = time (in years)
In this case, the principal is $12,500 and the interest rate is 6.5% or 0.065 as a decimal.
We want to find the time (t) needed to reach a total amount of $20,000. Let's substitute the values into our formula:
I = $20,000 - $12,500
P = $12,500
r = 0.065
t = unknown
$20,000 - $12,500 = $12,500 * 0.065 * t
$7,500 = $812.5 * t
Now, we can solve for t by dividing both sides of the equation by $812.5:
t = $7,500 / $812.5
t = 9.23
Since we're looking for the time rounded to the nearest whole number, we round up to 10 years.
Therefore, it will take approximately 10 years to have enough money in the account to purchase the boat.