Suppose you wanted to earn 650 interest rate from a bank dep

Suppose you wanted to earn $650 interest rate from a bank deposite of $ 12,500. (Note this is NOT a Rule of 72 problem)

a. How long would it take at a simple interest rate of 8%?

b. How long would it take at an effective rate of 8 %?

Solution

a) Simple interest(SI) = P*T*R/100

Where P = 12,500 , SI = 650 , R= 8, T =? ,

Put all values T = 0.65 years

b)