Loan Repayment Calculation: Friendly Loans Offer Analysis

How long will it take to pay off a $4,250 loan from Friendly Loans with a monthly payment of $90 and an APR of 15.3% compounded monthly?

What is the formula to calculate the number of months needed to repay a loan with regular monthly payments?

Loan Repayment Duration Calculation:

To find out how long it will take to pay off the loan, we can use the formula for the number of periods (months) needed to repay a loan with regular monthly payments. The formula is:

The formula for the number of periods (months) needed to repay a loan with regular monthly payments is:

n = -log(1 - (L * r)/P) / log(1 + r)

where:

- L is the monthly payment,

- P is the principal amount (loan amount),

- r is the monthly interest rate.

Given:

L = $90

P = $4,250

APR = 15.3%

First, we need to convert the annual interest rate to a monthly interest rate:

r = APR / (12 * 100)

Now, substitute the values into the formula and calculate to find the number of months needed to pay off the loan with the given terms.

After calculation:

It will take approximately 62 months to pay off the $4,250 loan from Friendly Loans with a monthly payment of $90 and a 15.3% APR compounded monthly.