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29 January, 18:48

Harry church borrowed 17,500.00 at 6.5% exact interest. He had to pay back a maturity value of 17,873.97 to pay off the loan. What was the term of the loan

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  1. 29 January, 19:12
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    Answer:the term of the loan is approximately 4 months

    Step-by-step explanation:

    The term of the loan means the period for which the loan was given.

    We would apply the formula for simple interest which is expressed as

    I = PRT/100

    Where

    P represents the principal

    R represents interest rate

    T represents time in years

    I = interest after t years

    From the information given

    P = 17500

    R = 6.5%

    I = total amount paid - principal

    I = 17,873.97 - 17,500.00 = 373.97

    Therefore

    373.97 = (17500 * 6.5 * T) / 100

    373.97 = 1137.5T

    T = 373.97/1137.5

    T = 0.32 years

    Converting to months, it becomes

    0.32 * 12 = 3.84

    Approximately 4 months.
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