Harry church borrowed 17,500.00 at 6.5% exact interest. He had to pay back a maturity value of 17,873.97 to pay off the loan. What was the term of the loan

Question

Mathematics

Nehemiah Holt

21 March, 04:10

Harry church borrowed 17,500.00 at 6.5% exact interest. He had to pay back a maturity value of 17,873.97 to pay off the loan. What was the term of the loan

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Answers (1)

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Mason Gilbert · Answer 1

Answer:the term of the loan is approximately 4 months

Step-by-step explanation:

The term of the loan means the period for which the loan was given.

We would apply the formula for simple interest which is expressed as

I = PRT/100

Where

P represents the principal

R represents interest rate

T represents time in years

I = interest after t years

From the information given

P = 17500

R = 6.5%

I = total amount paid - principal

I = 17,873.97 - 17,500.00 = 373.97

Therefore

373.97 = (17500 * 6.5 * T) / 100

373.97 = 1137.5T

T = 373.97/1137.5

T = 0.32 years

Converting to months, it becomes

0.32 * 12 = 3.84

Approximately 4 months.