Simple Interest
Math MCQs

Question :    Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8520 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $6000

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

Amount (A) = $8520

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 = $8520 – $6000 = $2520

Thus, Simple Interest = $2520

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 × 2520}/_{6000 × 6}

= ²⁵²⁰⁰⁰/₃₆₀₀₀

= 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) = $6000

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

Simple Interest = $2520 (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 $6000

= ⁶/₁₀₀ × 6000

= ^{6 × 6000}/₁₀₀

= ³⁶⁰⁰⁰/₁₀₀ = 360

Thus, simple Interest for 1 year = $360

Now,

∵ If the simple Interest is $360, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₆₀ years

∴ If the simple Interest is $2520, then the time = ¹/₃₆₀ × 2520 years

= ^{1 × 2520}/₃₆₀ years

= ²⁵²⁰/₃₆₀ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 5% simple interest.

(2) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $9460 to clear the loan, then find the time period of the loan.

(3) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.

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

(5) Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 4 years.

(6) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 6% simple interest.

(7) If Jennifer borrowed $3250 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(8) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.

(9) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $8145 to clear the loan, then find the time period of the loan.

(10) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.