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Homework Help: 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
    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).

  2. jcsd
  3. Oct 21, 2017 #2


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    Gold Member

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

    Ray Vickson

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