Respuesta :
Answer:
After 18.44 year loan will be paid
Explanation:
We have given an entrepreneur borrows $500,000 today.
So total amount is $500000
Annual payment is of $70000
Rate of interest r = 11.5 %
We have to find the time period
We know that total amount is given by
[tex]A=P(1+\frac{r}{100})^n[/tex], here A is total amount , P is yearly paid amount, r is rate of interest and n is time period
So [tex]500000=70000\times (1+\frac{11.25}{100})^n[/tex]
[tex]7.142=1.1125^n[/tex]
Taking log both side
[tex]log7.142=nlog1.1125[/tex]
[tex]n\times 0.0463=0.8538[/tex]
n = 18.44 year
So after 18.44 year loan will be paid
