Simple Interest
Math MCQs

Question :    Karen took a loan of $5900 at the rate of 7% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $5900

Rate of Simple Interest (R) = 7% per annum

Amount (A) = $8378

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 = $8378 – $5900 = $2478

Thus, Simple Interest = $2478

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 × 2478}/_{5900 × 7}

= ²⁴⁷⁸⁰⁰/₄₁₃₀₀

= 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) = $5900

Rate of Simple Interest (R) = 7% per annum

Simple Interest = $2478 (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 = 7% of Principal

= 7% of $5900

= ⁷/₁₀₀ × 5900

= ^{7 × 5900}/₁₀₀

= ⁴¹³⁰⁰/₁₀₀ = 413

Thus, simple Interest for 1 year = $413

Now,

∵ If the simple Interest is $413, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₁₃ years

∴ If the simple Interest is $2478, then the time = ¹/₄₁₃ × 2478 years

= ^{1 × 2478}/₄₁₃ years

= ²⁴⁷⁸/₄₁₃ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) How much loan did Laura borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9812.5 to clear it?

(2) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 2% simple interest?

(3) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 4 years.

(5) If Elizabeth paid $3864 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(6) Linda had to pay $3551 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(7) Elizabeth had to pay $3657 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(8) What amount does James have to pay after 6 years if he takes a loan of $3000 at 7% simple interest?

(9) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 7% simple interest.

(10) Kenneth had to pay $5300 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.