Simple Interest
Math MCQs

Question :    Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $6500

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

Amount (A) = $9620

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 = $9620 – $6500 = $3120

Thus, Simple Interest = $3120

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 × 3120}/_{6500 × 8}

= ³¹²⁰⁰⁰/₅₂₀₀₀

= 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) = $6500

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

Simple Interest = $3120 (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 $6500

= ⁸/₁₀₀ × 6500

= ^{8 × 6500}/₁₀₀

= ⁵²⁰⁰⁰/₁₀₀ = 520

Thus, simple Interest for 1 year = $520

Now,

∵ If the simple Interest is $520, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₅₂₀ years

∴ If the simple Interest is $3120, then the time = ¹/₅₂₀ × 3120 years

= ^{1 × 3120}/₅₂₀ years

= ³¹²⁰/₅₂₀ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.

(2) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9089 to clear the loan, then find the time period of the loan.

(3) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 4% simple interest?

(4) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 6% simple interest?

(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 7 years.

(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 7 years.

(7) If Richard paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(8) Joshua had to pay $5635 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(9) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 7 years.

(10) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?