Simple Interest
Math MCQs

Question :    Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $10720 to clear the loan, then find the time period of the loan.

Correct Answer  6

Solution & Explanation

Solution

Given,

Principal (P) = $6700

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

Amount (A) = $10720

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 = $10720 – $6700 = $4020

Thus, Simple Interest = $4020

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 × 4020}/_{6700 × 10}

= ⁴⁰²⁰⁰⁰/₆₇₀₀₀

= 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) = $6700

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

Simple Interest = $4020 (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 $6700

= ¹⁰/₁₀₀ × 6700

= ^{10 × 6700}/₁₀₀

= ⁶⁷⁰⁰⁰/₁₀₀ = 670

Thus, simple Interest for 1 year = $670

Now,

∵ If the simple Interest is $670, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₆₇₀ years

∴ If the simple Interest is $4020, then the time = ¹/₆₇₀ × 4020 years

= ^{1 × 4020}/₆₇₀ years

= ⁴⁰²⁰/₆₇₀ = 6 years

Thus, time (T) = 6 years Answer

Similar Questions

(1) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 4% simple interest?

(2) Nancy had to pay $4523.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(3) What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?

(4) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.

(5) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6390 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.

(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 9% simple interest for 3 years.

(8) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $12540 to clear the loan, then find the time period of the loan.

(9) If Emily paid $5700 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(10) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 5% simple interest?