Questions: If a customer was charged 40 on a payday loan of 700 with a daily interest rate of 0.36%, how many days did the customer take to repay the loan?

Transcript text: If a customer was charged $\$ 40$ on a payday loan of $\$ 700$ with a daily interest rate of $0.36 \%$, how many days did the customer take to repay the loan?

Solution

Solution Steps

Step 1: Identify the Variables

We have the following variables:

Principal ($ P $): \$700
Interest ($ I $): \$40
Daily interest rate ($ r $): $ 0.36\% = 0.0036 $

Step 2: Use the Simple Interest Formula

The formula for simple interest is given by: \[ I = P \times r \times t \] where $ t $ is the time in days. Rearranging the formula to solve for $ t $: \[ t = \frac{I}{P \times r} \]

Step 3: Calculate the Time

Substituting the known values into the equation: \[ t = \frac{40}{700 \times 0.0036} \] Calculating this gives: \[ t \approx 15.8730 \]