Question

Thomas invested five thousand dollars at four percent simple interest per annum.

How long (in days) will it be before his investment earns one hundred and eighty dollars.

Use the Banker's Rule for the number of days in a year.

Answer 1

Thomas invested = Principal P = $5,000

Annual interest rate r = 5%

Simple daily interest is given by the formula;

Per day interest = P x [ r /365 ]

= 5000 x [ 4% /365 ]

= 5000 x [ 0.04 / 365 ]

= 5000 x [ 0.00010959 ]

= 0.5480

Thomas earns per day as a interest = $ 0.5480

Let's consider that he earns $180  in x days

0.5480 x = 180

x = 180 / 0.5480

x = 328.46 days

His investment earns one hundred and eighty dollars in 328 days

Amount = Principal + Interest

= 5000 + 328

= $ 5328