Calculating Loan Payoff Time with Friendly Loans Offer

How long will it take for you to pay off the loan from Friendly Loans?

If you receive a loan offer of $4,750 from Friendly Loans with low monthly payments of $85 per month and an APR of 14.4% compounded monthly, how long will it take for you to pay off the loan?

Answer:

It will take approximately 57 months to pay off the loan.

Calculating the payoff time for a loan can help you manage your finances effectively. In this case, with an offer from Friendly Loans, you can expect to pay off the $4,750 loan with $85 monthly payments over a period of 57 months.

To determine the total amount paid over the period of the loan, you need to calculate the monthly payment amount multiplied by the total number of months. This total amount paid includes both the loan amount and the interest incurred.

The interest on the loan is calculated based on the APR of 14.4% compounded monthly. By using the future value of an annuity formula, you can find the total interest paid over the course of the loan. This calculation results in approximately 57 months as the time needed to pay off the loan.

Therefore, if you decide to accept the loan offer from Friendly Loans, you can plan your budget around the $85 monthly payments and be debt-free in approximately 57 months. It's essential to carefully consider loan offers and understand the terms before making any financial commitments.