A veterinarian would like to upgrade the computer system for the office. The cost is $25,000, and the interest rate is 3.5%. The amount of interest to be paid is $5,250. How many months is the loan for?
Mathematics · High School · Tue Nov 03 2020
Answered on
Given:
The cost is $25,000, and the interest rate is 3.5%.
Determine how many months is the loan if the amount of interest paid is $5250.
Solution:
In order to determine how many months is the loan, we must first determine what is the interest paid per month. This can be done by changing first 3.5% into decimal and multiplying it with the total cost. In order to change a percentage into decimal, simply divide the percentage by 100, hence in converting a decimal into percentage, we multiply the decimal by 100.
=3.5/100
=0.035
Interest paid monthly = ($25,000)(0.035)
Interest paid monthly =$875
To determine how many months was the loan, we divide the total interest paid by the interest paid monthly.
=$5250 / $875
= 6
The loan is 6 months long.