Question

Dave borrowed $6400 from his uncle with simple interest of 14% and eventually repaid $10,880 (principal and interest). What was the time period of the loan?

The time period of the loan was year(s).

Answer 1

To find the time period of the loan, we calculated the total interest paid by subtracting the principal from the total repaid amount. Then, using the simple interest formula, we found that the time period of the loan that Dave took from his uncle at a 14% interest rate was 5 years.

Step-by-step explanation:

To determine the time period of the loan, taken by Dave who borrowed $6400 from his uncle at a simple interest rate of 14% and repaid a total of $10,880, we use the formula for calculating simple interest:

Interest = Principal × Rate × Time

In Dave's case, the total amount of interest paid is equal to the total amount repaid minus the principal:

Interest = Total Repaid - Principal
= $10,880 - $6,400
= $4,480

Now we use the formula to find the time period:

$4,480 = $6,400 × 14% × Time
Time = $4,480 / ($6,400 × 14%)
Time = $4,480 / $896
Time = 5 years

The time period of the loan was 5 years.