Determine the time (in a years and days) it would take for a $36,000 loan at a rate of 3% to cost the borrower $400 in interest?

Interest is the return earned on an investment.

I = P * r * t

I - interest (I = $400),

P - principal (P = $36,000),

r - rate (r = 3$ = 0.03).

400 = 36,000 * 0.03 * t

400 = 1,080 t

t = 400 : 1,080 = 0.37 years.

0.37 * 365 = 135.05 ≈ 135 days

Answer: The time is 0.37 years or 135 days.