Question

A charity received a donation of $20,500, and invested it at a 6% simple interest rate.

A. How long would it take for the charity to earn $5, 535 interest?

B. What is the minimum number of full years the charity should allow the investment to mature to double the original investment?

Answer 1

After n years, the interest is prn. So, you want

(20500)(.06)n = 5535
n = 4.5 years

To double, you need .06n=2, or n=33.3 years