Simple Interest
Math MCQs

Question :    Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $5900

Rate of Simple Interest (R) = 10% per annum

Amount (A) = $9440

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 = $9440 – $5900 = $3540

Thus, Simple Interest = $3540

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 × 3540}/_{5900 × 10}

= ³⁵⁴⁰⁰⁰/₅₉₀₀₀

= 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) = $5900

Rate of Simple Interest (R) = 10% per annum

Simple Interest = $3540 (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 $5900

= ¹⁰/₁₀₀ × 5900

= ^{10 × 5900}/₁₀₀

= ⁵⁹⁰⁰⁰/₁₀₀ = 590

Thus, simple Interest for 1 year = $590

Now,

∵ If the simple Interest is $590, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₅₉₀ years

∴ If the simple Interest is $3540, then the time = ¹/₅₉₀ × 3540 years

= ^{1 × 3540}/₅₉₀ years

= ³⁵⁴⁰/₅₉₀ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) How much loan did Jacob borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9600 to clear it?

(2) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.

(3) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $8688 to clear the loan, then find the time period of the loan.

(4) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10269 to clear the loan, then find the time period of the loan.

(5) Kimberly had to pay $4929 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(6) 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.

(7) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.

(8) Find the amount to be paid if David borrowed a sum of $5400 at 5% simple interest for 8 years.

(9) How much loan did Joseph borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6840 to clear it?

(10) What amount does William have to pay after 6 years if he takes a loan of $3500 at 7% simple interest?