Chapter 8.1, Problem 52SR

To determine

To calculate:To find the time taken to earn $\$125$ in simple interest

Answer to Problem 52SR

M should invest for $\frac{8}{3}years$

Explanation of Solution

Given information:M invests $\$750$ at an annual rate of $6.25\%$

Formula Used:

Simple interest is calculated as

  $SI=\frac{P\times R\times T}{100}$

Where, $P=$ Principal

  $R=$ Rate of interest

  $T=$ Time in years

Calculation:

Given that M invests $\$750$ at an annual rate of $6.25\%$

Thus,

  $\begin{array}{l}P=\$750\\ R=6.25\%\\ SI=\$125\end{array}$

Time is calculated using formula for simple interest:

  $SI=\frac{P\times R\times T}{100}$

Substituting the values,

  $\begin{array}{l}125=\frac{750\times 6.25\times T}{100}\\ 125=\frac{750\times 625\times T}{100\times 100}\\ T=\frac{100\times 4\times 1}{30\times 5}\\ T=\frac{2\times 4\times 1}{3\times 1}\\ T=\frac{8}{3}years\end{array}$

Conclusion:

Thus, M should invest for $\frac{8}{3}years$