If you placed Php 2,000 into an investment account earning 3% simple interest, how many months does it take for you to have Php 2,025 in your account?
To calculate the number of months it takes for an investment to reach a certain amount with simple interest, we can use the formula:
A = P(1 + rt)
Where:
A is the final amount
P is the principal amount (initial investment)
r is the interest rate per period
t is the number of periods (in this case, months)
In this scenario, we have:
P = Php 2,000
A = Php 2,025
r = 3% (or 0.03)
Substituting these values into the formula, we get:
2,025 = 2,000(1 + 0.03t)
Dividing both sides of the equation by 2,000:
1.0125 = 1 + 0.03t
Subtracting 1 from both sides:
0.0125 = 0.03t
Dividing both sides by 0.03:
t = 0.0125 / 0.03
Simplifying the right side:
t ≈ 0.4167
Therefore, it takes approximately 0.4167 months, or about 0.4167 * 30 = 12.5 days, for the investment to grow from Php 2,000 to Php 2,025 with a 3% simple interest rate.
Answers & Comments
Answer:
To calculate the number of months it takes for an investment to reach a certain amount with simple interest, we can use the formula:
A = P(1 + rt)
Where:
A is the final amount
P is the principal amount (initial investment)
r is the interest rate per period
t is the number of periods (in this case, months)
In this scenario, we have:
P = Php 2,000
A = Php 2,025
r = 3% (or 0.03)
Substituting these values into the formula, we get:
2,025 = 2,000(1 + 0.03t)
Dividing both sides of the equation by 2,000:
1.0125 = 1 + 0.03t
Subtracting 1 from both sides:
0.0125 = 0.03t
Dividing both sides by 0.03:
t = 0.0125 / 0.03
Simplifying the right side:
t ≈ 0.4167
Therefore, it takes approximately 0.4167 months, or about 0.4167 * 30 = 12.5 days, for the investment to grow from Php 2,000 to Php 2,025 with a 3% simple interest rate.