Simple Interest
Math MCQs

Question :    David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $4800

Rate of Simple Interest (R) = 8% per annum

Amount (A) = $7104

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 = $7104 – $4800 = $2304

Thus, Simple Interest = $2304

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 × 2304}/_{4800 × 8}

= ²³⁰⁴⁰⁰/₃₈₄₀₀

= 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) = $4800

Rate of Simple Interest (R) = 8% per annum

Simple Interest = $2304 (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 = 8% of Principal

= 8% of $4800

= ⁸/₁₀₀ × 4800

= ^{8 × 4800}/₁₀₀

= ³⁸⁴⁰⁰/₁₀₀ = 384

Thus, simple Interest for 1 year = $384

Now,

∵ If the simple Interest is $384, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₈₄ years

∴ If the simple Interest is $2304, then the time = ¹/₃₈₄ × 2304 years

= ^{1 × 2304}/₃₈₄ years

= ²³⁰⁴/₃₈₄ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?

(2) James had to pay $3360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(3) What amount will be due after 2 years if William borrowed a sum of $3250 at a 4% simple interest?

(4) If Robert paid $3348 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(5) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 8% simple interest.

(6) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 3% simple interest.

(7) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 4% simple interest?

(8) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 8% simple interest?

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

(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 6% simple interest for 8 years.