Simple Interest
Math MCQs

Question :    Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $4600

Rate of Simple Interest (R) = 6% per annum

Amount (A) = $6256

Thus, time (T) = ?

Method (1) Using Formula

Calculation of Simple Interest, when Principal and Amount are given

Formual to Calculate Simple Interest when Principal and Amount are given

We know that, Amount (A) = Principal (P) + Simple Interest (SI)

⇒ Simple Interest (SI) = Amount – Principal

⇒ SI = $6256 – $4600 = $1656

Thus, Simple Interest = $1656

Calculation of the Time using forumula when Amount, Simple Interest and Principal are known

Formula to find the Time (T)

Time (T) = ^{100 × Simple Interest}/_{Principal × Rate of Interest}

⇒ T = ^{100 × SI}/_{P × R}

Thus, Time (T) = ^{100 × 1656}/_{4600 × 6}

= ¹⁶⁵⁶⁰⁰/₂₇₆₀₀

= 6 years (using formula)

Thus, Time (T) = 6 years (from time taken before calculation)Answer

Calculation of the Time using Unitary Method when Amount, Simple Interest and Principal are known

Here, we have

Principal (P) = $4600

Rate of Simple Interest (R) = 6% per annum

Simple Interest = $1656 (As calculated above by subtracting Principal from the Amount given)

We know that, interest is calculated on the basis of the Principal.

This means Simple Interest for 1 year = Rate of simple interest × Principal

Thus, Simple Interest for 1 year = 6% of Principal

= 6% of $4600

= ⁶/₁₀₀ × 4600

= ^{6 × 4600}/₁₀₀

= ²⁷⁶⁰⁰/₁₀₀ = 276

Thus, simple Interest for 1 year = $276

Now,

∵ If the simple Interest is $276, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₂₇₆ years

∴ If the simple Interest is $1656, then the time = ¹/₂₇₆ × 1656 years

= ^{1 × 1656}/₂₇₆ years

= ¹⁶⁵⁶/₂₇₆ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) Jennifer had to pay $3445 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(2) If Joseph borrowed $3700 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(3) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(4) If Kenneth paid $5400 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(5) Find the amount to be paid if Patricia borrowed a sum of $5150 at 3% simple interest for 8 years.

(6) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.

(7) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.

(8) What amount does John have to pay after 5 years if he takes a loan of $3200 at 3% simple interest?

(9) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9394 to clear the loan, then find the time period of the loan.

(10) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.