At a simple annual interest rate of 4.5%, how many years will it take Sam to earn $135 interest on an original deposit of $1,000?
To determine the number of years it will take Sam to earn $135 in interest on an original deposit of $1,000 at an annual interest rate of 4.5%, we can use the formula:
Interest = Principal * Rate * Time
In this case, the principal (P) is $1,000, the rate (R) is 4.5% (or 0.045), and the interest (I) is $135. We need to solve for the time (T).
Therefore, the equation becomes:
$135 = $1,000 * 0.045 * T
Now we can solve for T:
T = $135 / ($1,000 * 0.045)
T = 3
So it will take Sam approximately 3 years to earn $135 in interest on an original deposit of $1,000 at an annual interest rate of 4.5%.