Dr. Bell wants to borrow $4100 for home improvements. He doesn't want to pay more than $215.25 in interest. Find the longest time for which the money may be borrowed if the interest rate is 7% per year. Round to the nearest month.
A) 7 months
B) 12 months
C) 8 months
D) 9 months

Question

Quizplus · Accepted Answer

The interest paid on a loan is calculated using the formula I = Prt, where I is the interest, P is the principal amount ($4100), r is the annual interest rate (7% or 0.07), and t is the time in years. To find the longest time he can borrow the money without paying more than $215.25 in interest, we rearrange the formula to solve for t: t = I / (Pr). Plugging in the values, we get t = $215.25 / ($4100 * 0.07) ≈ 0.75 years. Converting 0.75 years to months gives us 9 months, rounding to the nearest month.

Dr Bell Wants to Borrow $4100 for Home Improvements