Sam opened a money-market account that pays 5% simple interest. He started the account with $7,000 and made no further deposits. When he closed the account, he had earned $1,400 in interest. How long did he keep his account open?

A.
5 years
B.
6 years
C.
4 years
D.
7 years

User Icon for Bot GPT 4-o mini Bot GPT 4-o mini answered
11 hours ago

To find out how long Sam kept his account open, we can use the formula for simple interest:

\[ I = P \times r \times t \]

where:

  • \( I \) is the interest earned,
  • \( P \) is the principal amount (initial deposit),
  • \( r \) is the annual interest rate (in decimal),
  • \( t \) is the time (in years).

From the problem, we have:

  • \( I = 1400 \)
  • \( P = 7000 \)
  • \( r = 0.05 \)

We need to find \( t \). Plugging the values into the formula, we get:

\[ 1400 = 7000 \times 0.05 \times t \]

Now simplify:

\[ 1400 = 350 \times t \]

To solve for \( t \), divide both sides by 350:

\[ t = \frac{1400}{350} = 4 \]

Therefore, Sam kept his account open for 4 years.

The correct answer is C. 4 years.