Tony invests $3,000 dollars into an account earning 12% interest per year. How long will it take him to make $3960 dollars in Simple interest?
To find out how long it will take Tony to make $3,960 in simple interest, we need to determine the interest rate, which is given as 12%, and the initial investment, which is $3,000.
Simple interest is calculated using the formula:
Interest = (Principal * Rate * Time)
Where:
- Principal is the initial investment
- Rate is the interest rate per period
- Time is the length of time (in years)
In this case, we need to rearrange the formula to solve for Time:
Time = Interest / (Principal * Rate)
Plugging in the given values:
Time = $3,960 / ($3,000 * 0.12)
Simplifying the equation:
Time = $3,960 / $360
Time = 11 years
Therefore, it will take Tony 11 years to make $3,960 in simple interest.