Answered: Frank borrowed $200 from a lender that…

Frank borrowed $200 from a lender that charged simple interest at an annual rate of 9%. When Frank paid off the loan, he paid $108 in interest. How long was the loan for, in years?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1EA: Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest...

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

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Frank borrowed $200 from a lender that charged simple interest at an annual rate of 9%. When Frank paid off the loan, he paid $108 in interest. How long was the loan for, in years?

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