Question

Zoe takes out a discounted loan for $1,200 at a simple interest rate of 6%, but only receives $1,020 into her bank account. What's the duration of the loan?

Answer 1

Answer:30 months

Step-by-step explanation:

Answer 2

Answer: The duration of the loan is approximately 2.5 years.

Step-by-step explanation:

Since we have given that

Principal = $1200

Rate of interest = 6%

Interest = $1020

We need to find the duration of the loan.

As we know the formula for "Simple interest":

$I=\dfrac{P\times R\times T}{100}\\\\180=\dfrac{1200\times 6\times T}{100}\\\\180=12\times 6T\\\\\dfrac{180}{72}=T\\\\T=12.5\ yrs$

Hence, the duration of the loan is approximately 2.5 years.