Owen borrowed money from the bank to buy a car at an interest rate of 7.8%. If he paid $5850 in interest rate on the $15000 loan, how long was the loan?
To find the length of the loan, we need to use the formula for calculating simple interest:
Interest = Principal * Rate * Time
In this case, the interest paid is $5850, the principal (loan amount) is $15000, and the interest rate is 7.8%. We can rearrange the formula to solve for time (the length of the loan):
Time = Interest / (Principal * Rate)
Substituting the given values into the formula:
Time = $5850 / ($15000 * 0.078)
Calculating:
Time = $5850 / $1170
Time ≈ 5 years
Therefore, the loan was approximately 5 years long.