Question

Kaitlin borrowed 900 from a lender that charged simple interest at an annual rate of 3% . When Kaitlin paid off the loan, she paid 108 in interest. How long was the loan for, in years? If necessary, refer to the list of financial formulas.

Answer 1

4 years

Explanation:

the formula for calculating simple interest is

I =
`(PRT)/(100)`

where I is interest , P the amount borrowed, R is rate of interest and T is time in years.

here I = 108, P = 900, R = 3 , then

108 =
`(900(3)T)/(100)` =
`(2700T)/(100)` = 27T ( divide both sides by 27 )

4 = T

the loan was for 4 years