Simple Interest
Math MCQs

Question :    Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6705 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $4500

Rate of Simple Interest (R) = 7% per annum

Amount (A) = $6705

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 = $6705 – $4500 = $2205

Thus, Simple Interest = $2205

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 × 2205}/_{4500 × 7}

= ²²⁰⁵⁰⁰/₃₁₅₀₀

= 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) = $4500

Rate of Simple Interest (R) = 7% per annum

Simple Interest = $2205 (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 = 7% of Principal

= 7% of $4500

= ⁷/₁₀₀ × 4500

= ^{7 × 4500}/₁₀₀

= ³¹⁵⁰⁰/₁₀₀ = 315

Thus, simple Interest for 1 year = $315

Now,

∵ If the simple Interest is $315, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₁₅ years

∴ If the simple Interest is $2205, then the time = ¹/₃₁₅ × 2205 years

= ^{1 × 2205}/₃₁₅ years

= ²²⁰⁵/₃₁₅ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 4 years.

(2) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.

(3) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 7% simple interest?

(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 8 years.

(5) How much loan did Deborah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8195 to clear it?

(6) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 9% simple interest?

(7) Patricia had to pay $3339 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(8) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 8% simple interest?

(9) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.

(10) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $8600 to clear the loan, then find the time period of the loan.