A $5000 loan was to be repaid with 8% simple annual interest. A total of $5350 was paid. How long was the loan outstanding?

1. Loan = 5000 dollars

Every years = 8% interest

Paid a total of 5350 dollar

Find the term of the loan

=> 8% = 8/100

=>.08

=> 5000 x. 08 = 400, but he only paid 350 as interest that means the term is less than 1 year

=> In a year, there are 12 months, so that’s equals

=> 12 months / 8% interest

=> 1.5, every month his loan is increasing 1.5%

=> 5000 x 0.07 = 350

=> 7 percent x 1.5 percent = 10.5

Thus, he paid 5350 dollars for his 10 months loan