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Lily just paid off a $400 loan. She had to pay $60 in interest at a simple annual interest rate of 5%. How many years did Lily have this loan?

A2
B3
C4.5
D5

Verified Answer :

Aliwohaish12

I=prt,,60=400*0.05t,,t=3 ..................

Answer:  The correct option is (B) 3.

Step-by-step explanation:  Given that Lily  just paid off a $400 loan. She had to pay $60 in interest at a simple annual interest rate of 5%.

We are to find the number of years for which Lily had this loan.

Let n be the required number of years.

Also, P = $400, S.I. = $60 and r% = 5%.

Therefore, by the formula of simple interest, we have

\(S.I.=\dfrac{Prn}{100}\\\\\\\Rightarrow 60=\dfrac{400\times5\times n}{100}\\\\\\\Rightarrow n=\dfrac{60}{20}\\\\\\\Rightarrow n=3.\)

Thus, the required number of years is 3.

Option (B) is CORRECT.

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