Final answer:
The term of a $1,300 loan at 2.5% simple interest with a $130 total interest is 4 years. This is calculated using the simple interest formula I = PRT and solving for T.
Step-by-step explanation:
To find the term of the loan when Mary borrowed $1,300 at 2.5% simple interest and the interest was $130.00, we use the formula for simple interest I = PRT, where I is the interest, P is the principal amount, R is the rate of interest, and T is the time in years.
First, convert the rate from a percentage to a decimal by dividing by 100: R = 2.5/100 = 0.025
Using the formula, we replace I with $130, P with $1,300, and R with 0.025:
$130 = $1,300 × 0.025 × T
To solve for T, we divide both sides by ($1,300 × 0.025):
T = $130 / ($1,300 × 0.025)
T = 4 years
Therefore, the term of the loan is 4 years.