QuestionMr. Lee invests money at $8\%$ simple interest. How many years to double the principal?

Studdy Solution

STEP 1

Assumptions1. The interest rate is8% per annum. . The interest is calculated as simple interest, not compounding.
3. Mr. Lee wants to receive an amount which is double the principal.
4. We need to find the time it will take for Mr. Lee to receive this amount.

STEP 2

First, we need to understand the formula for simple interest. The formula for simple interest is $Interest = Principal \\times Rate \\times Time$

STEP 3

In this case, we know that the amount Mr. Lee wants to receive is double the principal. This means that the interest he earns is equal to the principal. So we can rewrite the formula as $Principal = Principal \\times Rate \\times Time$

STEP 4

We can simplify this equation by dividing both sides by the principal. This gives us $1 = Rate \\times Time$

STEP 5

Now, plug in the given value for the rate to calculate the time.
$1 =8\% \\times Time$

STEP 6

Convert the percentage to a decimal value.
$8\% =0.08$ $1 =0.08 \\times Time$

STEP 7

To isolate Time, we divide both sides of the equation by0.08.
$Time =1 /0.08$

STEP 8

Calculate the time.
$Time =1 /0.08 =12.5$ So, it will take Mr. Lee12.5 years to receive an amount which is double the principal.

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