Question

A company borrowed $25000 at 3.5% and was charged $2625 in interest. How long was it before the company repaid the money?

Answer 1

To solve this, we are going to use the simple interest formula: $A=P(1+rt)$
where
$A$ is the total amount the company paid after $t$ years.
$P$ is the money that the company borrowed
$r$ is the interest rate in decimal form 

Notice that if the company paid $2625 in interest, the total amount that the company paid was the interest plus the amount they borrowed, so:
$A=25000+2625$
$A=27625$
Next, we are going to convert the interest rate to decimal form. To do that we are going to divide the rate by 100%
$r= \frac{3.5}{100}$
$r=0.035$

Now we know that $A=27625$, $P=25000$, and $r=0.035$. So lets replace those values in our simple interest formula to find $t$:
$A=P(1+rt)$
$27625=25000(1+0.035t)$
$\frac{27625}{25000} =1+0.035t$
$1+0.035t=1.105$
$0.035t=1.105-1$
$0.035t=0.105$
$t= \frac{0.105}{0.035}$
$t=3$

We can conclude that the company repaid the money after 3 years.