Question

Frederick needs to borrow $3000 for a down payment on a new car. His uncle decided to loan him the money as a 2.6% loan. Frederick doesn't want to pay more than $312 in interest. How many years does Frederick have to pay back the loan?

Answer 1

Step 1

Find the interest on the loan to his uncle every year.

$3000\times0.026\text{ = \ 78 interest per year}$

Step 2

Find the number of years it will take him to payback

$=\frac{312}{78}=\text{ 4 years}$

Therefore, it will