Loan and Interest questions

Mathematics
Tutor: None Selected Time limit: 1 Day

a. Ingrid took a $20,000 loan for a photo business at 18% simple interest, which resulted in a future value of $22,500. How many days was the loan held? Assume a year is 365.25 days.
b. Ingrid also needs $5,000 to purchase camera equipment. She invests $4,000 of her own cash into an account paying 5% interest compounded annually. How many years will be required to earn the $1,000 in interest that she needs?

May 21st, 2015

p=20,000

r=18

t=x

A=22,500

I=PRT/100

MAKE T THE SUBJECT

T=100(A-P)/PR

T=100(22500-20,000)/18*20,000

T=250000/360000

T=0.694 *365.25

253.48 DAYS

253.5 dAYS

The formula for annual compound interest is A = P (1 + r/n) ^ nt:

Where:

A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for


May 21st, 2015

Thank you very much for answering part a. of the question. Any ideas on part b.?

May 21st, 2015

I have provided the formular due to time if you follow the formular of compound interest you will arrive at the answer

May 21st, 2015

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