Question

Elsa borrowed $700 from a lender that charged simple interest at an annual rate of 7%. When Elsa paid off the loan, she paid $147 in interest. How long was the loan for, in years?

Answer 1

To find the duration of the loan in years, we can use the formula for simple interest:

Simple Interest (I) = Principal (P) * Rate (R) * Time (T)

Where:

I = Interest

P = Principal (the borrowed amount)

R = Annual interest rate (as a decimal)

T = Time in years

We know that Elsa borrowed $700 and paid $147 in interest. Therefore, the total amount she paid back (including the principal and interest) is $700 + $147 = $847.

Now, we can set up the equation to find the time (T):

$147 = $700 * 0.07 * T

To solve for T, divide both sides of the equation by $700 * 0.07:

T = $147 / ($700 * 0.07)

T = 147 / 49

T = 3

So, the loan was for 3 years.

Step-by-step explanation: