Simple Interest
Math MCQs

Question :    Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $5900

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

Amount (A) = $8378

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 = $8378 – $5900 = $2478

Thus, Simple Interest = $2478

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 × 2478}/_{5900 × 6}

= ²⁴⁷⁸⁰⁰/₃₅₄₀₀

= 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) = $5900

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

Simple Interest = $2478 (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 $5900

= ⁶/₁₀₀ × 5900

= ^{6 × 5900}/₁₀₀

= ³⁵⁴⁰⁰/₁₀₀ = 354

Thus, simple Interest for 1 year = $354

Now,

∵ If the simple Interest is $354, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₅₄ years

∴ If the simple Interest is $2478, then the time = ¹/₃₅₄ × 2478 years

= ^{1 × 2478}/₃₅₄ years

= ²⁴⁷⁸/₃₅₄ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) What amount does John have to pay after 6 years if he takes a loan of $3200 at 10% simple interest?

(2) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9750 to clear it?

(3) Ashley had to pay $5096 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(4) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.

(5) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 7% simple interest?

(6) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 8 years.

(7) How much loan did Robert borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5865 to clear it?

(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 3 years.

(9) Calculate the amount due if Sarah borrowed a sum of $3850 at 5% simple interest for 3 years.

(10) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.