Your brother lends you $125 at an annual interest rate of 25%. If you want to pay no more than $62.50 in simple interest, in how many years will you need to pay off the loan?<\/p>\n\n\n\n
The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n To determine how many years you need to pay off a loan of $125 with a simple interest rate of 25% while keeping the total interest paid to no more than $62.50, we can use the formula for simple interest:<\/p>\n\n\n\n [ Where:<\/p>\n\n\n\n In this case:<\/p>\n\n\n\n Substituting the known values into the formula gives us:<\/p>\n\n\n\n [ Now, since we want the interest (I) to be no more than $62.50, we set up the inequality:<\/p>\n\n\n\n [ Calculating the left side:<\/p>\n\n\n\n [ So the inequality becomes:<\/p>\n\n\n\n [ To find (t), divide both sides by 31.25:<\/p>\n\n\n\n [ Calculating the right side:<\/p>\n\n\n\n [ This means you can take up to 2 years to pay off the loan without exceeding $62.50 in interest.<\/p>\n\n\n\n In summary, if you want to ensure that the total interest paid on your $125 loan at a 25% annual interest rate does not exceed $62.50, you should plan to pay off the loan within 2 years. After 2 years, the interest accrued would exactly reach $62.50, which is the limit you\u2019ve set. If you repay the loan sooner than that, the interest paid will be less.<\/p>\n","protected":false},"excerpt":{"rendered":" Your brother lends you $125 at an annual interest rate of 25%. If you want to pay no more than $62.50 in simple interest, in how many years will you need to pay off the loan? The Correct Answer and Explanation is : To determine how many years you need to pay off a loan […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-153861","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/153861","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=153861"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/153861\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=153861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=153861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=153861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
I = P \\times r \\times t
]<\/p>\n\n\n\n\n
\n
I = 125 \\times 0.25 \\times t
]<\/p>\n\n\n\n
125 \\times 0.25 \\times t \\leq 62.50
]<\/p>\n\n\n\n
125 \\times 0.25 = 31.25
]<\/p>\n\n\n\n
31.25 \\times t \\leq 62.50
]<\/p>\n\n\n\n
t \\leq \\frac{62.50}{31.25}
]<\/p>\n\n\n\n
t \\leq 2
]<\/p>\n\n\n\n