Answer:
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Step-by-step explanation:
To find the time period of the loan, we can use the formula for simple interest:
\[ I = P \cdot r \cdot t \]
Where:
- \( I \) is the interest paid (\$866.25)
- \( P \) is the principal amount borrowed (\$1,500)
- \( r \) is the interest rate (8% or 0.08)
- \( t \) is the time period of the loan (what we're solving for)
Substituting the given values:
\[ 866.25 = 1500 \times 0.08 \times t \]
Now, solve for \( t \):
\[ t = \frac{866.25}{1500 \times 0.08} \]
\[ t ≈ \frac{866.25}{120} ≈ 7.21875 \]
So, the time period of the loan is approximately 7.22 years.
