Irrational kind of means something can't be dealt with, for example, you cannot divide irrational numbers. Rational is something that you can do and will be good to work with, you can divide rational numbers.
The final value (FV) that is paid in a loan (which is the sum of the capital and the interests) equals the present value (PV) of the loan multiplied by , in a simple interest context, where "n" equals the periods of time and "i" equals the interest rate valid for that periodicity.
Then . In this case, PV=$15,000; final value equals FV=$15,000+1,687.5= $16,687.5.
We should clear "n" from our equation, which means: . Dividing both sides by 15,000, then subtracting 1 both sides, and finally dividing by 0.075 both sides, results in n=1.5.
Then, Malorie had the loan for one an a half periods.
, in a simple interest context, where "n" equals the periods of time and "i" equals the interest rate valid for that periodicity.
. In this case, PV=$15,000; final value equals FV=$15,000+1,687.5= $16,687.5.
. Dividing both sides by 15,000, then subtracting 1 both sides, and finally dividing by 0.075 both sides, results in n=1.5.