Sollozo just made a single payment to repay a loan he had with the Corleone Finance Company. He paid a total of $86,500 which included interest of $56,500 at 48% compounded monthly. How long ago was the money borrowed?
A) 19 months
B) 63 months
C) 27 months
D) 34 months
E) 47 months

Question

Quizplus · Accepted Answer

The interest formula for compound interest is A = P(1 + r/n)^(nt). Solving for t using the given values: A = $86,500, P = $30,000 (since $86,500 - $56,500 = $30,000), r = 0.48, n = 12, we find t ≈ 27 months.

Sollozo Just Made a Single Payment to Repay a Loan