Question

A $4,000 loan, taken now, with a simple interest rate of 7% per year, will require a total repayment of $5,960. At what time t will the loan mature?

Answer 1

A = p + prt is the formula for the total you will receive after t years, r = rate of simple interest, and p = principal (amount you put into the bank)

so A = 5960

5960 = 4000 + 4000(.07) (t)

Let's solve for t, the # of years the money was in the bank
5960 = 4000 + 280t
1960 = 280t
t = 7

The money was in the bank for 7 years.