Question

To open the restaurant, you had to borrow $10,000 from the bank. If you pay $827 each month, how long will it take for you to pay them back?

a) 12 months
b) 15 months
c) 20 months
d) 24 months

Answer 1

To pay back a $10,000 loan with monthly payments of $827, it will take approximately 12 months. This calculation assumes that there is no interest being applied to the loan.

Step-by-step explanation:

To calculate how long it will take to pay back a loan of $10,000 by making monthly payments of $827, you can simply divide the total loan amount by the monthly payment amount. The formula to calculate the time to pay off the loan is:

Time (in months) = Total Loan Amount / Monthly Payment Amount

Using the provided numbers we have:

Time (in months) = $10,000 / $827 ≈ 12.09

Since we can't have a fraction of a month for a payment, we need to round up to the next whole month. Therefore, it will take 12 months to pay back the loan if you pay $827 each month. This calculation assumes there is no interest on the loan. If there was interest, it would take longer to pay off the loan and the monthly payment would also include interest charges.