Simple Interest
Math MCQs

Question :    Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $6900

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

Amount (A) = $10626

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 = $10626 – $6900 = $3726

Thus, Simple Interest = $3726

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 × 3726}/_{6900 × 9}

= ³⁷²⁶⁰⁰/₆₂₁₀₀

= 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) = $6900

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

Simple Interest = $3726 (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 $6900

= ⁹/₁₀₀ × 6900

= ^{9 × 6900}/₁₀₀

= ⁶²¹⁰⁰/₁₀₀ = 621

Thus, simple Interest for 1 year = $621

Now,

∵ If the simple Interest is $621, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₆₂₁ years

∴ If the simple Interest is $3726, then the time = ¹/₆₂₁ × 3726 years

= ^{1 × 3726}/₆₂₁ years

= ³⁷²⁶/₆₂₁ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) What amount does David have to pay after 5 years if he takes a loan of $3400 at 6% simple interest?

(2) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.

(3) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7072 to clear the loan, then find the time period of the loan.

(4) How much loan did Richard borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6440 to clear it?

(5) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 8% simple interest?

(6) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 5% simple interest.

(7) How much loan did Andrew borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7480 to clear it?

(8) Thomas had to pay $4370 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 4 years.

(10) Calculate the amount due if Thomas borrowed a sum of $3800 at 7% simple interest for 4 years.