Question

In what time will $400 amount to $512 if the simple interest is the calculated at 14% p.a ?

Answer 1

I=P*R*T
Here T=?
A=512=P+I    //Given P=400
=> I=A-P=512-400=112
Now substitute I(interest) in the first equation:
112=400*0.14*T
=> T=112/56=2years

Answer 2

Concept

The relation between simple interest and time is given as

$A = P (1 + rt)$ , where A is the final amount, P is the initial principal balance, r is the interest rate in p.a. and t is the time in year.

Given

A = $512

P = $400

r = 14 %

Find

We have to calculate the value of time t using the above formula.

Solution

512 = 400 ( 1 + 0.14t )

1.28 = 1 + 0.14t

0.28 = 0.14t

t = 2 years

Hence it will take 2 years to increase the amount from $400 to $512 with interest rate of 14 % p.a.

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