Use the simple interest formula I=prt, where I is the interest, p the principal, r the annual interest rate, and t the time in years.
3 years
Practice makes perfect
If we deposit money in a savings account, the bank pays us interest for the use of our money. To calculate the interest I, we use the simple interest formula.
I= p r t, where...
I& = Interest
p& = Principal
r& = Annual interest rate
t& = Time (in years)Now, we made a deposit of $400 in a savings account with an interest rate of 5 %= 0.05 and we earned $ 60 in interest.
I= 60, p= 400, r= 0.05
To calculate the time it takes the account to earn this interest, we will substitute these values into the simple interest formula and solve for t. Let's go!
