Chapter 3, Lesson 6

In this lesson students will:

- find the term of the investment given information about the future value, principle amount and rate of simple interest

## Term of Investment

#### Using the Future Value Formula

Often when working with loans and investments, we are interested in the length of time it will take to reach a certain goal. The length of time required to obtain a certain future value of money is sometimes called the *term of the investment*. Similar to what we did in our last lesson, we can begin with our future value formula and solve for the time variable .

#### Using the Interest Formula

While the formula above certainly works, if we realize that is actually the amount of interest that we earn in dollars, we can simplify this formula a bit.

Of course, this is exactly the formula that we would obtain if we had started with the interest formula and isolated .

Let’s work through a few examples using the simplified formula.