On an 8% straight term loan of $6,071, the borrower paid total interest of $1,700. how long did he have the loan?

Question

Nikolai Montgomery

Business

2 July, 22:45

On an 8% straight term loan of $6,071, the borrower paid total interest of $1,700. how long did he have the loan?

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Cottonball · Answer 1

Calculation of period of the loan:

It is given that The loan amount is $6,071 and the annual interest rate is 8%, that means the interest for one year shall be $6,071*8% = $485.68.

Now we are given that the total interest paid is $1,700. The time period of the loan can be calculated by dividing the total interest by the annual interest amount. Hence the period of the loan shall be = 1700 / 485.68 = 3.5 Years.

Hence he had the loan for 3.5 years.