Question

Jazzmine took out a loan of $17,500 to buy a new car. She received a 3.5% interest rate compounded annually and paid $3,274.50 in interest. How long did it take Jazzmine to pay off the loan?

Answer 1

Answer:

Time period = 5 year (Approx.)

Step-by-step explanation:

Given:

Amount of loan = $17,500

Rate of interest = 3.5% compounded annually

Amount paid as interest = $3,247.5

Find:

Time period

Computation:

Using compounded interest formula

I = P[(1+r)ⁿ - 1]

3,247.50 = 17,500[(1+3.5%)ⁿ - 1]

3,247.50 = 17,500[(1+0.035)ⁿ - 1]

3,247.50 = 17,500[(1.035)ⁿ - 1]

Time period = 4.948

Time period = 5 year (Approx.)