Question

You decided it is important to pay off some of your debt to help build your credit score. If you paid $1,339 interest on $49,700 at 4%,

what was the time, using exact interest?

Answer 1

To find the time it takes to pay off the debt, we need to use the formula for simple interest:

Interest = Principal x Rate x Time

In this case, the principal is $49,700, the rate is 4%, and the interest is $1,339.

Plugging in these values into the formula, we get:

$1,339 = $49,700 x 4% x Time

To find the time, we need to isolate it on one side of the equation. First, let's convert the 4% into decimal form by dividing it by 100:

4% = 0.04

Now, let's rewrite the equation:

$1,339 = $49,700 x 0.04 x Time

Next, let's divide both sides of the equation by $49,700 x 0.04:

$1,339 / ($49,700 x 0.04) = Time

Now, let's calculate the right side of the equation:

$1,339 / ($49,700 x 0.04) ≈ 0.676

So, the time it takes to pay off the debt is approximately 0.676 years.

Please note that this calculation assumes that the interest is being compounded annually and that there are no additional payments or changes to the principal during the repayment period.