Question

Joanna took out a simple interest loan of $4500. She ended up paying $6160 in total. If the interest rate was 8%, what was the length, or time of the loan?

a) 4 years
b) 5 years
c) 6 years
d) 7 years

Answer 1

The length of the loan is approximately 5 years.

Step-by-step explanation:

To find the length or time of the loan, we can use the formula for simple interest: Interest = Principal × Rate × Time.

In this case, the principal is $4500, the interest rate is 8%, and the total interest paid is $6160 - $4500 = $1660.

Plugging in the values, we get: $1660 = $4500 × 0.08 × Time.

Solving for Time, we have: Time = $1660 / ($4500 × 0.08) ≈ 4.628 years. Rounding to the nearest whole number, the length of the loan is approximately 5 years.