Susan deposits $1,200 in an account that earns 8% simple interest annually. In how many months will Susan's account balance reach $1,344? (Use the simple interest formula I=prt, where I = interest, p = principal or amount borrowed, r = rate, and t = time in years.)
You need to calculate the interest between the initial amount ($1200)Â and the final amount ($1344). The difference is $144, this is the interest that you need to gain.Â
[tex] I = prt [/tex]
[tex] 144 = 1200 * 0.08 * t [/tex]
[tex] 144 = 96t [/tex]Â
[tex] t = 1.5 years [/tex]
Convert 1.5 years into months
[tex] 1.5 years * 12 months/year = 18 months [/tex]
