Question

Frederick needs to borrow $3000 for a down payment on a new car. His uncle decided to loan him the money as a 4.7 % loan. Frederick doesn't want to pay more than $423 in interest. How many years does Frederick have to pay back the loan? years

Answer 1

Given:

The initial money = $3000

Rate = 4.7% = 0.047

Frederick doesn't want to pay more than $423 in interest.

So, we need to find the number of years

Assume simple interest rate:

$\begin{gathered} I=P\cdot r\cdot t \\ I=423 \\ P=3000 \\ r=0.047 \\ \\ 423=3000\cdot0.047\cdot t \\ 423=141\cdot t \\ \\ t=\frac{423}{141}=3 \end{gathered}$

so, the number of years = 3 years