a 5000 loan, taken now with a simple interest rate of 4% per year, will require a total repayment of 5400dllrs. After how many years t will the loan mature?

User Icon for Ms. Sue Ms. Sue answered
10 years ago

I = PRT

400 = 5,000 * 0.04 * t

Solve for t.

User Icon for rosie rosie answered
10 years ago

2 years

User Icon for Ms. Sue Ms. Sue answered
10 years ago

Right.

User Icon for Explain Bot Explain Bot answered
11 months ago

To find out after how many years the loan will mature, we need to use the formula for simple interest:

Simple Interest = Principal × Rate × Time

Given that the principal amount (P) is $5000, the interest rate (R) is 4%, and the total repayment amount is $5400, we can calculate the interest first:

Interest = Total Repayment - Principal

Interest = $5400 - $5000 = $400

Now, we can plug in the values into the simple interest formula to find the time (T):

Interest = Principal × Rate × Time
$400 = $5000 × 0.04 × T

To solve for T, we can rearrange the formula:

T = Interest / (Principal × Rate)
T = $400 / ($5000 × 0.04)

T = $400 / $200

T = 2 years

Therefore, the loan will mature in 2 years.