Dijon borrow $900 from a lender that charged simple interest at an annual rate of 7%. When Dijon paid off the loan, he paid $378 in interest. How long was the loan for, in years.

Answer 1

To find out how long the loan was for, we can use the simple interest formula:

$$\text{Interest}=\text{Principal}\times \text{Rate}\times \text{Time}$$

where
- Interest ($I$) is the total interest paid,
- Principal ($P$) is the initial amount borrowed,
- Rate ($r$) is the annual interest rate (in decimal form), and
- Time ($t$) is the time the money is borrowed for in years.

We are given that:
- Interest ($I$) is $378,
- Principal ($P$) is $900, and
- Rate ($r$) is 7% (which is 0.07 in decimal form).

We need to solve for Time ($t$).

Let's plug in the values we have into the formula and solve for $t$:

$$378=900\times 0.07\times t$$

$$378=63t$$

To find $t$, divide both sides by 63:

$$t=\frac{378}{63}$$

$$t=6$$

Therefore, the loan was for 6 years.