For 20 years you have to leave the money in the account to earn $900 in interest.
- Simple interest is a quick and easy way to calculate interest on money. In the simple interest method, interest is always applied to the principal amount and the same interest rate is applied in each time cycle.
- The formula is given by [tex]S.I=\frac{P\times R\times T}{100}[/tex] where P = Principal, R = Annual Interest Rate (%), T = Hours
- Principal: Principal is the amount originally borrowed or invested by the bank.
- Interest Rate: Interest rate is the rate at which the principal is given to someone for a period of time.
- Time: Time is the period during which principal is given to someone.
- Amount: When a person takes out a loan from a bank, he has to repay the amount of principal plus interest, and this repayment amount is called the amount.
It is given that principal amount = 1500, rate =3 % and simple interest = $900 .Putting these value in equation (1) we get
[tex]900=\frac{1500\times 3\times T}{100} \\\\T=\frac{900\times 100}{1500\times 3} \\\\T=20[/tex]
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