1. Limited time only! Sign up for a free 30min personal tutor trial with Chegg Tutors
    Dismiss Notice
Dismiss Notice
Join Physics Forums Today!
The friendliest, high quality science and math community on the planet! Everyone who loves science is here!

Simple Interest: Number of Years

  1. Oct 21, 2017 #1
    1. The problem statement, all variables and given/known data
    An investment is made at 12.5% annual simple interest. Find the number of years it will take for the cumulative value of the interest to equal the original investment?

    2. Relevant equations
    V=P(1+rt)
    Where V= interest on Amount
    P = Principal amount
    r= interest rate
    t= number of years for which amount is invested

    3. The attempt at a solution
    Simple Interest formula is:

    V=P(1+rt) Let p =10 & t=1

    V= 10(1+12.5) = 135


    In just one year the interest obtained is more than the Principal value. Some body please guide me. What I understand is that, I have to find the number of years in which the interest obtained & added (with previous years’ interest becomes equal to the Principal).

    Zulfi.
     
  2. jcsd
  3. Oct 21, 2017 #2

    andrewkirk

    User Avatar
    Science Advisor
    Homework Helper
    Gold Member

    r is 12.5%, which is 0.125, not 12.5.
     
  4. Oct 21, 2017 #3

    Ray Vickson

    User Avatar
    Science Advisor
    Homework Helper

    Your formula for the interest is wrong: interest = Prt, NOT P(1+rt).
     
Know someone interested in this topic? Share this thread via Reddit, Google+, Twitter, or Facebook

Have something to add?
Draft saved Draft deleted



Similar Discussions: Simple Interest: Number of Years
  1. Simple Interest % help (Replies: 7)

  2. Simple Interest (Replies: 1)

Loading...