Given:
Principal or the money borrowed - $5,000
Interest Rate = 12% or 0.12 in decimal form
Interest - $150
Find: duration of the loan (t in years)
Solution:
To be able to determine the duration of the loan, let's use the formula of Simple Interest and solve for t.

To solve for t, divide both sides of the equation by Pr.

Hence, to solve for the duration, we need to divide the interest by the product of the principal and the interest rate.

Answer:
The duration of the loan is 0.25 years or 3 months.