A college student receives an interest-free loan of $8,570 from a relative. The student will repay $170 per month until the loan is paid off. After how many months will the student owe $5,000?
A)after 4.2 months.
B)after 21 months.
C)after 31 months.
D)after 29 months.
E)after 24 months.

Question

Quizplus · Accepted Answer

To find out after how many months the student will owe $5,000, we subtract the $5,000 from the original loan amount of $8,570 to find out how much of the loan will have been paid off by that point. $8,570 - $5,000 = $3,570. Since the student is repaying $170 per month, we divide the $3,570 by $170 to find out how many months it will take to pay off that amount. $3,570 / $170 = 21 months.

A College Student Receives an Interest-Free Loan of $8,570 from a Relative