problem on simple interest

Topic:- simple interest

Interest is a fee paid on borrowed assets. It is the price paid for the use of borrowed money or, money earned by deposited funds. Assets that are sometimes lent with interest include money, shares, consumer goods through hire purchase, major assets such as aircraft, and even entire factories in finance lease arrangements.

Let's see a problem on this.

Question:

Greg invests $1200 at an annual rate of 6.5%. How long will it take until Greg earns $195 in interest?

Solution:

Formula to find the interest is

I = PTR/100

here p = profit=1200
   t = time
   r = rate=6.5

Substitute the values in formula,so that

        (1200 x T x 6.5)
195 = -----------------
             100

         T = 2.4

Greg will earn $195 in interest in 2.5 years.

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