Answer:
Jeremiah has had the account for 18 years.
Step-by-step explanation:
Simple interest is the interest that is produced by investing or lending initial capital over a period of time. This interest rate does not accumulate at the initial capital, so the interest generated or paid in all periods is the same, while the interest rate and term do not vary.
The simple interest rate is usually expressed as a percentage, which must be expressed in decimal form in order to use its value in the equation shown below. For that, you must divide the percentage value by 100.
The amount of interest paid or charged depends on three important amounts: Capital, interest rate and time. This is expressed by the equation:
I = C * i * t
Where:
- I: interest earned.
- C: initial capital.
- i: interest rate, which as mentioned, must be a decimal number.
- t: period of time, expressed in years.
In this case:
- I = $1624.35-$975 = $649.35 that is, the amount of interest earned during t years.
- C=$975
- i = 3.7%, which expressed in decimal form is 0.037 (3.7% / 100%)
- t: is the time you want to calculate in which Jeremiah obtains a gain of $649.35.
Replacing in the equation, you get:
649.35=975*0.037*t
Isolating the value of t, you get:
[tex]t=\frac{649.35}{975*0.037}[/tex]
t=18
So, Jeremiah has had the account for 18 years
