A $8,200 loan, taken now, with a simple interest rate of 5% per year, will require a total payment of $10,660. When will the loan mature ?
A)6 months
B) 4 years
C) 18 years
D) 16 years
E) 6 years

Question

A $8,200 loan, taken now, with a simple interest rate of 5% per year, will require a total payment of $10,660. When will the loan mature  ?
A)6 months
B) 4 years
C) 18 years
D) 16 years
E) 6 years

Quizplus · Accepted Answer

The total interest paid on the loan is $10,660 - $8,200 = $2,460. The annual interest is 5% of $8,200, which is $410. To find the number of years, divide the total interest by the annual interest: $2,460 / $410 = 6 years.

A $8,200 Loan, Taken Now, with a Simple Interest Rate