Simple Interest
Math MCQs

Question :    Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $5400

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

Amount (A) = $8316

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 = $8316 – $5400 = $2916

Thus, Simple Interest = $2916

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 × 2916}/_{5400 × 9}

= ²⁹¹⁶⁰⁰/₄₈₆₀₀

= 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) = $5400

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

Simple Interest = $2916 (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 $5400

= ⁹/₁₀₀ × 5400

= ^{9 × 5400}/₁₀₀

= ⁴⁸⁶⁰⁰/₁₀₀ = 486

Thus, simple Interest for 1 year = $486

Now,

∵ If the simple Interest is $486, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₈₆ years

∴ If the simple Interest is $2916, then the time = ¹/₄₈₆ × 2916 years

= ^{1 × 2916}/₄₈₆ years

= ²⁹¹⁶/₄₈₆ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) If John paid $3712 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(2) If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(3) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 7% simple interest?

(4) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8008 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.

(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 3 years.

(7) Michael had to pay $3498 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(8) Find the amount to be paid if Karen borrowed a sum of $5950 at 10% simple interest for 8 years.

(9) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 5% per annum?

(10) How much loan did Susan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7062.5 to clear it?