Answer:
The correct answer is 56.77 weeks.
Explanation:
According to the scenario, the given data are as follows:
PV = $25,000
Payment (pmt) = $500
Rate of interest (r) = .45% per week
Time period (t) = ?
So, we can calculate the loan term period by using following formula:
PV ÷ Pmt = (1 - (1 + r)^ -t) ÷ r
So, by putting the value we get,
$25,000 ÷ $500 = ( 1 - ( 1 + 0.0045)^-n) ÷ 0.0045
$50 = ( 1 - ( 1 + 0.0045)^-n) ÷ 0.0045
$50 × 0.0045 = ( 1 - ( 1 + 0.0045)^-t)
0.225 = ( 1 - ( 1 + 0.0045)^-t)
( 1 + 0.0045)^-t) = 1 - 0.225
(( 1.0045)^-t ) = 0.775
t = 56.77
Hence, the loan term period is 56.77 weeks.
