Simple Interest
Math MCQs

Question :    Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $5200

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

Amount (A) = $7384

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 = $7384 – $5200 = $2184

Thus, Simple Interest = $2184

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 × 2184}/_{5200 × 6}

= ²¹⁸⁴⁰⁰/₃₁₂₀₀

= 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) = $5200

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

Simple Interest = $2184 (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 $5200

= ⁶/₁₀₀ × 5200

= ^{6 × 5200}/₁₀₀

= ³¹²⁰⁰/₁₀₀ = 312

Thus, simple Interest for 1 year = $312

Now,

∵ If the simple Interest is $312, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₁₂ years

∴ If the simple Interest is $2184, then the time = ¹/₃₁₂ × 2184 years

= ^{1 × 2184}/₃₁₂ years

= ²¹⁸⁴/₃₁₂ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 8% simple interest for 8 years.

(2) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 4 years.

(3) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 8 years.

(4) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $8313 to clear the loan, then find the time period of the loan.

(5) How much loan did Ashley borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7205 to clear it?

(6) What amount does William have to pay after 5 years if he takes a loan of $3500 at 3% simple interest?

(7) If Karen paid $4582 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(8) If Jennifer paid $3900 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(9) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 10% simple interest.