Simple Interest: Number of Years

[zak100]

Homework Statement

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?

Homework 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

The Attempt at a Solution

Simple Interest formula is:

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

V= 10(1+12.5) = 135In 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.

 

[andrewkirk]

r is 12.5%, which is 0.125, not 12.5.

 

[Ray Vickson]

Homework Statement

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?

Homework 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

The Attempt at a Solution

Simple Interest formula is:

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

V= 10(1+12.5) = 135In 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.

Your formula for the interest is wrong: interest = Prt, NOT P(1+rt).