SOLUTION: shelly has a 13000 home equity loan that is charging her 4.25% interest. if she make payment of 400 at the end of each month, how long will it takes her to pay off the loan?

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Question 1149651: shelly has a 13000 home equity loan that is charging her 4.25% interest. if she make payment of 400 at the end of each month, how long will it takes her to pay off the loan?
Answer by greenestamps(13200)   (Show Source): You can put this solution on YOUR website!


Learn the loan formula and how to use it....



P = principal (amount of loan)
A = amount of regular payment
r = annual interest rate
n = # of payments per year
t = time (years)

Note from those definitions that r/n is the periodic interest rate, and n*t is the total number of payments.

In this example....

The unknown (number of years to repay the loan, t) is in an exponent; so an algebraic solution will require the use of logarithms.





log() = -12t*log()

-12t = (log())/log()


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