Question

Karen borrowed $1000 from a friend that agreed to charge her a very low interest rate of .25% per month. The deal is that Karen will pay back $1100 at the time when the interest brings the total up to that amount. How many months will Karen have before the total reaches

$1100?
months (ROUNDED TO THE NEAREST MONTH)

Answer 1

The interest amount Karen needs to pay each month is $1000 * .0025 = $2.5.

So, she needs to pay $1100 - $1000 = $100 in interest.

Therefore, Karen will have to pay for 100 / 2.5 = 40 months.

Rounding to the nearest month, Karen will have to pay for 40 months.