Question

Martha borrowed $300 from a lender that charged simple interest at an annual rate of 7 % .When Martina paid off the loan , she paid $105 in interest.How long was the loan for ,in years?

Answer 1

5 years

Step-by-step explanation

The simple interest formula is,

`i=P* r* t`

Where

• i: interested accumulated

,

• P: principal amount

,

• r: annual interest rate

,

• t: time in years

In this problem we know that the principal amount P = 300, the interest rate is r = 7% and the accumulated interest i = 105. We have to find the time t in years,

`105=300\cdot0.07\cdot t`

Solving for t,

`t=(105)/(300\cdot0.07)=(105)/(21)=5`

The loan was for 5 years.