PHP 5,000.00 is invested at an annual interest rate of 7.5%. If the interest earned after 1 year is PHP 375.00, what is the time period in years?*1 point0.5 years1 year1.5 years2 years
Question
PHP 5,000.00 is invested at an annual interest rate of 7.5%. If the interest earned after 1 year is PHP 375.00, what is the time period in years?*1 point0.5 years1 year1.5 years2 years
Solution
The formula for calculating simple interest is I = PRT, where I is the interest, P is the principal amount (initial investment), R is the rate of interest, and T is the time period.
Given in the problem: P = PHP 5,000.00 R = 7.5% = 0.075 (in decimal form) I = PHP 375.00
We need to find T.
Substituting the given values into the formula, we get:
375 = 5000 * 0.075 * T
To solve for T, we divide both sides of the equation by (5000 * 0.075):
T = 375 / (5000 * 0.075)
Calculating the above expression gives T = 1 year.
So, the time period is 1 year.
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