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A $240 interest-free loan is to be paid back in equal monthly payments

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Bunuel
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A $240 interest-free loan is to be paid back in equal monthly payments [#permalink] New post   07 Sep 2021, 04:05
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A $240 interest-free loan is to be paid back in equal monthly payments. If a total of 2.5% percent of the original amount of the loan is paid back semi-annually, then how many months will it take to pay back $21.00 ?

A. 6
B. 7
C. 18
D. 21
E. 24
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Studyeastcoast
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A $240 interest-free loan is to be paid back in equal monthly payments [#permalink] New post   Updated on: 08 Sep 2021, 14:06
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[Corrected by Foreheadson; the payments can only be made in 6 month intervals. Thanks Foreheadson! :thumbsup: ]

The interest free loan in the amount of $240 is to be paid back in semi-annual payments (ie. - twice a year) of 2.5%.

2.5% = 25/1000 x 240 = (25 x 24)/100 = (5 x 5 x 2 x 2 x 2 x 3)/100 = (10 x 10 x 6)/100 = 600/100 = $6

$6 every 6 months

Minimum number of months to pay back $21...$21/$6/6 month interval = 3.5 "6 month" intervals

Or 4 complete 6 month intervals = 4 x 6 = 24 months

Answer E

Originally posted by Studyeastcoast on 08 Sep 2021, 11:44.
Last edited by Studyeastcoast on 08 Sep 2021, 14:06, edited 1 time in total.
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Re: A $240 interest-free loan is to be paid back in equal monthly payments [#permalink] New post   08 Sep 2021, 13:41
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Studyeastcoast wrote:
The interest free loan in the amount of $240 is to be paid back in semi-annual payments (ie. - twice a year) of 2.5%.

2.5% = 25/1000 x 240 = (25 x 24)/100 = (5 x 5 x 2 x 2 x 2 x 3)/100 = (10 x 10 x 6)/100 = 600/100 = $6

$6 every 6 months = $1 per month

It will take 21 months to pay back $21

Answer D

I think there is a trick. the question says the payment is done twice a year. so it must be multiple of 6. so it must be greater or equal to 21, which is E.

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Re: A $240 interest-free loan is to be paid back in equal monthly payments [#permalink] New post   10 Sep 2021, 07:43
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240*2.5% =6for each semi annual year
21/6=3.5 half year
3.5*6=21 months is right ans
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Re: A $240 interest-free loan is to be paid back in equal monthly payments [#permalink] New post   10 Sep 2021, 11:37
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As Foreheadson pointed out, the payments can only be made every six months. So, to pay back $21, it would take 4 six month periods.

4 x 6 = 24 months

Answer E

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A $240 interest-free loan is to be paid back in equal monthly payments [#permalink] New post   18 Sep 2021, 10:03
Bunuel wrote:
A $240 interest-free loan is to be paid back in equal monthly payments. If a total of 2.5% percent of the original amount of the loan is paid back semi-annually, then how many months will it take to pay back $21.00 ?

A. 6
B. 7
C. 18
D. 21
E. 24


Many of you missed the fact that the loan was paid back in equal monthly instalments.


\(\frac{2.5}{100}*240 = 6\)

Hence \($6\) is paid in \(6\) months i.e. \($1 \) is paid per month.

Hence for \($21 \), we will need \(21\) months.

Ans-D

Hope it's clear.
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Aditya1803
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Re: A $240 interest-free loan is to be paid back in equal monthly payments [#permalink] New post   19 Sep 2021, 00:34
(25/1000)*240$= 6$ in 6 months
=> 1$ in 1 month
=> 21$ in 21 months
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Re: A $240 interest-free loan is to be paid back in equal monthly payments [#permalink] New post   16 Apr 2024, 04:06
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Re: A $240 interest-free loan is to be paid back in equal monthly payments [#permalink]
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