Answer:
The length of the loan period is 0.25 years , i.e 3 months
Step-by-step explanation:
Given as :
The loan amount = $ 10,000
The rate of interest applied = 5 % at simple interest yearly
The Amount receive = $ 10 ,000 + 125 interest
So, The interest receive for the loan = $ 125
Let the duration of loan period = T years
From Simple Interest method
Simple Interest = [tex]\dfrac{\textrm Principal\times \textrm rate\times \textrm Time}{100}[/tex]
or, $ 125 = [tex]\dfrac{\textrm $ 10,000\times \textrm 5\times \textrm Time}{100}[/tex]
or. 125 × 100 = 10,000 × 5 × T
or, T = [tex]\dfrac{125\times 100}{5\times 10,000}[/tex]
or, T = [tex]\dfrac{12500}{50,000}[/tex]
∴ T = 0.25
So, the time period of loan = 0.25 years = 3 months
Hence The length of the loan period is 0.25 years , i.e 3 months Answer
