If the interest it withdrawn annually and not compounded, the number of years T is given by
1200*0.07*T = 252
T = 252/[(0.07)(1200)] = 3.0 years
If the interest is compounded (lefgt in the account), it will take a bit less time, but the formula to use is quite different.
I believe they expect you to assume interest is withdrawn each year.
How long will it take to earn $252 in interest if $1200 is invested at a 7% annual interest rate??
2 answers
You deposited $1200 dollars in a savings account that earns a simple interest rate of 3% per year. How many years do you need to keep the money in the account to earn $252 in interest?
1 answer