Question

Vanessa received a $12,000 loan from the bank to buy a motorcycle. She will repay the loan to the bank with an $300 monthly payment.

Answer 1

Time = 42 months

Explanation:

`Monthly \ payment = [rate + (rate)/((1 + rate)^(month)-1)] * principal`

Monthly payment = 300

Principal = 12000

`Rate \% = (300)/(12000) * 100 = (30)/(12) = (5)/(2) = 2.5`

Substituting and solving Months = 42 months

Answer 2

40 months

Explanation:

It will take Vanessa 40 months or 3 years and 4 months to repay the bank their loan amount(without interest ofc).