Question

During the life of a $2500 loan, the interest paid is $318.75. If the interest rate is 8.5%, how long was the loan?

Answer 1

1.5 years

Explanation:

Simple Interest I = PRT

Principal = 2500, Rate R= 8.5%, SI = 318.75, T = ?

Now, substituting the above value

318.75 = 2500*0.085 * T

T = 318.75 / 2500*0.085 years

T = 318.75 / 2500*0.085 years

T = 318.75 / 212.5 years

T = 1.5 years