Simple Interest
Math MCQs

Question :    David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $7680 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) = 10% per annum

Amount (A) = $7680

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 = $7680 – $4800 = $2880

Thus, Simple Interest = $2880

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 × 2880}/_{4800 × 10}

= ²⁸⁸⁰⁰⁰/₄₈₀₀₀

= 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) = 10% per annum

Simple Interest = $2880 (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 = 10% of Principal

= 10% of $4800

= ¹⁰/₁₀₀ × 4800

= ^{10 × 4800}/₁₀₀

= ⁴⁸⁰⁰⁰/₁₀₀ = 480

Thus, simple Interest for 1 year = $480

Now,

∵ If the simple Interest is $480, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₈₀ years

∴ If the simple Interest is $2880, then the time = ¹/₄₈₀ × 2880 years

= ^{1 × 2880}/₄₈₀ years

= ²⁸⁸⁰/₄₈₀ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.

(2) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $10836 to clear the loan, then find the time period of the loan.

(3) How much loan did Linda borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6152.5 to clear it?

(4) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8550 to clear the loan, then find the time period of the loan.

(5) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 5% simple interest?

(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 8 years.

(7) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.

(8) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $9774 to clear the loan, then find the time period of the loan.

(9) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 6% simple interest?

(10) If Charles paid $4212 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.