Question

Vanessa received a $12,000 loan from the bank to buy a motorcycle. She will repay the loan to the bank with an $300 monthly payment.

Answer 1

Answer:

40 months

Step-by-step explanation:

It will take Vanessa 40 months or 3 years and 4 months to repay the bank their loan amount(without interest ofc).

Answer 2

Answer:

Time = 42 months

Step-by-step explanation:

$Monthly \ payment = [rate + \frac{rate}{(1 + rate)^{month}-1}] \times principal$

Monthly payment = 300

Principal = 12000

$Rate \% = \frac{300}{12000} \times 100 = \frac{30}{12} = \frac{5}{2} = 2.5$

Substituting and solving Months = 42 months