Question

Rob takes out a loan for $25,000. The interest rate is 7.5%. If rob pays $39,375 in interest, how long will it take to pay off the loan?

Answer 1

21 weeks/months/years

the unit is not clarified in the question.

Explanation:

First, we have to calculate the amount of interest added after each interest period. In this case, we know the interest rate is 7.5% so after each period, there will be extra 1875 dollars of interest.

25000 x 0.075 = 1875

Now, we find out how many periods of interest adds up to a sum of 39375. We just divide the amount of interest it's asking by the amount of interest after 1 period.

39,375/1875 = 21

boom, It will take 21 periods.