Answer to Question #265094 in Financial Math for Mimi

Question

For how long would £500 have to be left in an account paying 4% interest p.a. to give a balance of £600?

What is asked:

What are given:

What is the answer:

Answer 1

We are looking for the time it would take $\$500$  in an account paying $4\%$ interest p.a. to give a balance of $\$600$ ,and we are given;

Principal=$\$500$ rate=0.04, A=$\$600$

Simple interest ,A=P(1+rt)

600 =500(1+0.04t)

1.2-1=0.04t

t=$\frac{0.2}{0.04}=5$

$\therefore$ it would take 5 years for £500 in an account paying 4% interest p.a. to give a balance of £600