Question

If you earned $240 interest on a loan of $600 at an interest rate of 5%, how many years was the loan for?

Answer 1

The loan was for 8 years.

Explanation:

It is stated that you earned $240 interest on a loan of $600 at an interest rate of 5%.

Find the duration time by using the formula

I = Pit

Here:

• 'I' is the interest

• 'P' is the total principal loan

• 'i' is the rate of interest per year

• 't' is the total time in years

substituting I = $240, P = $600 and i = 5%

I = Pit

t = I / Pi

= 240 / (0.05 × 600)

= 240 / 30

t = 8 years

Therefore, the loan was for 8 years.