You borrow $1,500 at 12% (M) and owe $1,741.45 on the due date. What is the...

You borrow $1,500 at 12% (M) and owe $1,741.45 on the due date. What is the term of the loan? Round the answer to n to a whole (i.e. n = 13.999 = 14, n= 4.00005 = 4) - do this before you convert to years and months. Answer in years and months (use zero if no years or no months).

Expert Solution

Here PV = 1500; rate = 12%/12 (as M or monthly); FV = $1,741.45. PMT = 0.

We have to compute the nper and the formula will be: NPER (12%/12, 0, -1500, 1741.45)

This will give a value of 14.9998. This will be rounded to nearest whole i.e. 15. Thus n = 15 (in months)

This is in months and hence in years and months =1 year 3 months (15 months = 1 year + 3 months or 1.25 years)

jeff jeffy answered 2 years ago

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