Question

5

A new business borrows $320,000 at a yearly simple interest rate of 7%. The total
amount the company repays for the loan and interest is $678,400. How long did it
take to pay off the loan?
Interest = (principal)(rate in decimal)(time in years)
1 = (p) (0) (t)
1. Read the word problem and circle and label the
interest, principal, rate, and time in years given in
the problem.
2. Underline the question(s)
3. Make any conversions needed for example:
a. Percent into decimals
b.
Months into years
4. Write down the simple interest formula
5 Plug in the known variables into the interest formula
6. Solve for the unknown
7. Answer the questions using complete sentences
and question stem

Answer 1

16 years

Explanation:

Annual interest payment is 7% * 320k = 22,400

Total interest is 678400-320000=358400

358400/22400=16