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What is the length of time a loan will last if it has a rate of 0.02, a principal of $500, and it accrued $60 of interest if Interest = Principal * Rate * Time. How would you reduce the time of the loan?
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What is the length of time a loan will last if it has a rate of 0.02, a principal of $500, and it accrued $60 of interest if Interest = Principal * Rate * Time. How would you reduce the time of the loan?

User Darrell Plank
by
6.1k points

2 Answers

2 votes

Answer and Explanation

T=I÷pr

T=60÷(500×0.02)

T=6 years <-- Answer

User Lars P
by
6.4k points
6 votes
Interest = Principal * Rate * Time
I=prt
Solve for t
T=I÷pr
T=60÷(500×0.02)
T=6 years

You can reduce the time of the loan by increasing the rate of interest
For example
T=60÷(500×0.05)
T=2.4 years
User Kzzzf
by
5.1k points
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