Question
Margaret received $671.50 in cash as proceeds from a loan of $680.00 The discount rate was 10% simple interest. Find the discount period in months.
Hummm. With simple interest, a rate of 10% on $680, in one month the balance would be 680*(1+(0.1/12)) = 685.66666. Ergo, the monthly payment would be 5.66666. So then number of months to make 671.5 would be (671.5/5.66666) = 118.5
Hummm. With simple interest, a rate of 10% on $680, in one month the balance would be 680*(1+(0.1/12)) = 685.66666. Ergo, the monthly payment would be 5.66666. So then number of months to make 671.5 would be (671.5/5.66666) = 118.5