Simple Interest
Math MCQs

Question :    Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $9940 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $7000

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

Amount (A) = $9940

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 = $9940 – $7000 = $2940

Thus, Simple Interest = $2940

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 × 2940}/_{7000 × 7}

= ²⁹⁴⁰⁰⁰/₄₉₀₀₀

= 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) = $7000

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

Simple Interest = $2940 (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 $7000

= ⁷/₁₀₀ × 7000

= ^{7 × 7000}/₁₀₀

= ⁴⁹⁰⁰⁰/₁₀₀ = 490

Thus, simple Interest for 1 year = $490

Now,

∵ If the simple Interest is $490, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₉₀ years

∴ If the simple Interest is $2940, then the time = ¹/₄₉₀ × 2940 years

= ^{1 × 2940}/₄₉₀ years

= ²⁹⁴⁰/₄₉₀ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) How much loan did Michelle borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7645 to clear it?

(2) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7084 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 4 years.

(4) How much loan did Andrew borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8500 to clear it?

(5) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 8% simple interest?

(6) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 3% simple interest.

(7) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 10% simple interest?

(8) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 5% simple interest?

(9) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7140 to clear the loan, then find the time period of the loan.

(10) If Jennifer paid $3770 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.