Gordon Rosel went to his bank to find out how long it will take for $2,500 to amount to $3,090 at 6% simple interest. Calculate the number of years. (Round time in years to the nearest tenth.) Number of years

Gordon Rosel went to his bank to find out how long it will take for $2,500 to amount to $3,090 at 6% simple interest. Calculate the number of years. (Round time in years to the nearest tenth.) Number of years

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Gordon Rosel went to his bank to find out how long it will take for $2,500 to amount to $3,090 at 6% simple interest. Calculate the
number of years. (Round time in years to the nearest tenth.)
Number of years
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Expert Solution

Step 1

Simple interest = Principal × Rate × Time

Simple interest = $3,090-$2,500 = $590

Thus,

$590 = $2,500 × 6% × Time

$590 = $150 × Time

Time = $590 ÷ $150 = 3.9 years or 4 years

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