a. If the interest rate on the loan is 12%, how long will it take for her to repay the loan fully? b. How long will it take if the interest rate is 9%? c. How long will it take if she has to pay 15% annual interest? d. Reviewing your answers in parts a, b, and c, describe the general relationship between the interest rate and the amount of time it will take Mia to repay the loan fully.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Time to repay installment loan Personal Finance Problem Mia Salto wishes to determine how long it will take to repay a $8,000 loan given that the lender requires her to make annual end-of-year installment payments of $1,757.
a. If the interest rate on the loan is 12%, how long will it take for her to repay the loan fully?
b. How long will it take if the interest rate is 9%?
c. How long will it take if she has to pay 15% annual interest?
d. Reviewing your answers in parts a, b, and c, describe the general relationship between the interest rate and the amount of time it will take Mia to repay the loan fully.
a. If Mia can borrow at an annual interest rate of 12%, the amount of time it will take for her to repay the loan fully is
years. (Round to two decimal places.)
Transcribed Image Text:Time to repay installment loan Personal Finance Problem Mia Salto wishes to determine how long it will take to repay a $8,000 loan given that the lender requires her to make annual end-of-year installment payments of $1,757. a. If the interest rate on the loan is 12%, how long will it take for her to repay the loan fully? b. How long will it take if the interest rate is 9%? c. How long will it take if she has to pay 15% annual interest? d. Reviewing your answers in parts a, b, and c, describe the general relationship between the interest rate and the amount of time it will take Mia to repay the loan fully. a. If Mia can borrow at an annual interest rate of 12%, the amount of time it will take for her to repay the loan fully is years. (Round to two decimal places.)
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