Question

You decided it is important to pay off some of your debt to help build your credit score. If you paid $1,307 interest on $45,000 at 4.0%, what was the time, using exact interest (rounded up to the nearest day)?

Answer 1

Answer: 0.72611 years = 265 days

Explanation:

GIVEN the following ;

PRINCIPAL(P) = $45,000

EXACT INTEREST(SI) = $1,307

RATE(R) = 4%

EXACT INTEREST = (PRINCIPAL × (RATE÷100) × TIME)

$1,307 = ($45,000 × (4÷100) × T)

$1,307 = $45,000 × T × 0.04

$1,307 = $1800 × T

T = ($1,307 ÷ $1,800)

T = 0.726111 years

Using 365-days a year

T = 0.72611 × 365 = 265.03

T = 265days

Answer 2

Answer: 73days

Explanation:

$1,307 interest on $45,000 at 4.0%

Time used in paying back the loan is calculated thus:

Principal is $45,000

Interest is 4.0%

Tenor is x

Using the Simple Interest formula

I= P x T x R/100

1,307 = 45,000 x T x 0.04/100

1,307= 1,800T/100

1,800T = 1,307 x 100

1,800T = 130,700

T = 130,700/1,800

= 72.6

= 73days