Question

What is the length of time a loan will last if it has a rate of 0.02, a principal of $500, and it accrued $60 of interest if Interest = Principal * Rate * Time. How would you reduce the time of the loan?

Answer 1

Answer and Explanation

T=I÷pr

T=60÷(500×0.02)

T=6 years <-- Answer

Answer 2

Interest = Principal * Rate * Time
I=prt
Solve for t
T=I÷pr
T=60÷(500×0.02)
T=6 years

You can reduce the time of the loan by increasing the rate of interest
For example
T=60÷(500×0.05)
T=2.4 years