Simple Interest
Math MCQs

Question :    William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7100 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $5000

Rate of Simple Interest (R) = 6% per annum

Amount (A) = $7100

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 = $7100 – $5000 = $2100

Thus, Simple Interest = $2100

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 × 2100}/_{5000 × 6}

= ²¹⁰⁰⁰⁰/₃₀₀₀₀

= 7 years (using formula)

Thus, Time (T) = 7 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) = $5000

Rate of Simple Interest (R) = 6% per annum

Simple Interest = $2100 (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 = 6% of Principal

= 6% of $5000

= ⁶/₁₀₀ × 5000

= ^{6 × 5000}/₁₀₀

= ³⁰⁰⁰⁰/₁₀₀ = 300

Thus, simple Interest for 1 year = $300

Now,

∵ If the simple Interest is $300, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₀₀ years

∴ If the simple Interest is $2100, then the time = ¹/₃₀₀ × 2100 years

= ^{1 × 2100}/₃₀₀ years

= ²¹⁰⁰/₃₀₀ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 2% simple interest.

(2) Find the amount to be paid if David borrowed a sum of $5400 at 10% simple interest for 8 years.

(3) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.

(4) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.

(5) If Kimberly paid $5208 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(6) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 3% simple interest?

(7) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 3 years.

(9) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.

(10) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 3% simple interest?