Question

how many years are needed for $55 to yield a 8.8% in interest at the simple interest rate of 8%

Answer 1

The accumulated value at 8.8% rate of return is:
55*(1.088) = 59.84

At simple interest rate, we will need -
=> 55*(1+ni) = 59.84
=> 55 + (55*0.08*n) = 59.84
=> 55 + 4.40n = 59.84
=> 4.40n = 59.84 - 55
=> 4.40n = 4.84
=> n = 4.84/4.40
Therefore n = 1.1 years

Solving this gives n=1.1years
Therefore, it will take 1.1 years to earn 8%.

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