Answer:
94 months
Step-by-step explanation:
You can use the amortization formula for this.
A = P(r/12)/(1 -(1 +r/12)^(-n))
A is the monthly payment; P is the principal amount; r is the annual interest rate, and n is the number of months.
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Filling in the numbers, we can solve for n:
25 = 1000(0.26/12)/(1 -(1+0.26/12)^-n)
Multiplying by the denominator and dividing by 25, we have ...
1 -(1+0.26/12)^-n = 1000(0.26)/(12(25)) = 13/15
Subtracting 13/15 and adding (1+0.26/12)^-n gives ...
2/15 = (1+0.26/12)^-n
Taking logs turns this into a linear equation:
log(2/15) = -n·log(1+0.26/12)
n = log(15/2)/log(1+0.26/12) = 93.999
It would take 94 months, or 7 years 10 months, to pay off the balance.
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Your total of payments would be $2,350.
