Simple Interest
Math MCQs

Question :    William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $7700 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $5000

Rate of Simple Interest (R) = 9% per annum

Amount (A) = $7700

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 = $7700 – $5000 = $2700

Thus, Simple Interest = $2700

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 × 2700}/_{5000 × 9}

= ²⁷⁰⁰⁰⁰/₄₅₀₀₀

= 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) = $5000

Rate of Simple Interest (R) = 9% per annum

Simple Interest = $2700 (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 = 9% of Principal

= 9% of $5000

= ⁹/₁₀₀ × 5000

= ^{9 × 5000}/₁₀₀

= ⁴⁵⁰⁰⁰/₁₀₀ = 450

Thus, simple Interest for 1 year = $450

Now,

∵ If the simple Interest is $450, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₅₀ years

∴ If the simple Interest is $2700, then the time = ¹/₄₅₀ × 2700 years

= ^{1 × 2700}/₄₅₀ years

= ²⁷⁰⁰/₄₅₀ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) James had to pay $3270 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(2) How much loan did Anthony borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7875 to clear it?

(3) Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 8 years.

(4) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.

(5) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.

(6) What amount does Elizabeth have to pay after 6 years if he takes a loan of $3450 at 8% simple interest?

(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 8 years.

(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 10% simple interest for 7 years.

(9) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?

(10) Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 7 years.