Deposit account earns simple interest of 12% annually. After how many years will the effective rate of interest decline to 7%?

Simple interest 12% annually is calculated using the formula = amount * (1 + Years * interest)

Compound interest 7% annually is calculated using the formula = amount * (1 + interest)^Years

To get the desired result, we will equate the formulas, taking amount as $1

(1 + 7%)^n = (1 + n * 12%)

1.07^n = ( 1 + n*12%)

Solving for n we get the value of n as 15.6 years

In 15.6 years, the 12% simple interest will decline to effective rate of interest 7%