Question

Ms. Pecho currently owes $637.50 in simple interest on a loan of $2500 at an annual interest rate of 17%. How long has she had the loan?

Answer 1

`1 1/2` years which is `1` year and `6` months.

Explanation:

The formula for simple interest is

`SI = (PRT)/100`

You can either substitute the given values first and the solve for `T`, or you can transpose the formula to have `T` as the subject.

`T = (100xxSI)/(PR)`

`T= (100 xx 637.50)/(2500xx17)`

`T=1.5`

As time is always in years, this means it was for `1 1/2` years which is `1` year and `6` months

Answer 2

`=1.5years`

Explanation:

1. Given that this is a simple interest loan, the problem can be solved using the formula.
   `I="Pin"`
   `where:`
   `I="Interest"`
   `P="Principal"`
   `n="number of years"`
2. Rearrange the formula and isolate `n` as required and plug in data as given.
   `I="Pin"`
   `n=I/"Pi"`
   `n=($637.50)/(($2500)(0.17))`
   `n=1.5yr=1 (1)/(2) years`