Simple Interest
Math MCQs

Question :    Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8642 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $5800

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

Amount (A) = $8642

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 = $8642 – $5800 = $2842

Thus, Simple Interest = $2842

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 × 2842}/_{5800 × 7}

= ²⁸⁴²⁰⁰/₄₀₆₀₀

= 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) = $5800

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

Simple Interest = $2842 (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 $5800

= ⁷/₁₀₀ × 5800

= ^{7 × 5800}/₁₀₀

= ⁴⁰⁶⁰⁰/₁₀₀ = 406

Thus, simple Interest for 1 year = $406

Now,

∵ If the simple Interest is $406, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₀₆ years

∴ If the simple Interest is $2842, then the time = ¹/₄₀₆ × 2842 years

= ^{1 × 2842}/₄₀₆ years

= ²⁸⁴²/₄₀₆ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) How much loan did Laura borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9027.5 to clear it?

(2) If Mary borrowed $3050 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(3) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $8550 to clear the loan, then find the time period of the loan.

(4) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $10432 to clear the loan, then find the time period of the loan.

(5) How much loan did Andrew borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8500 to clear it?

(6) Matthew had to pay $4830 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(7) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 7% simple interest?

(8) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10608 to clear the loan, then find the time period of the loan.

(9) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 2% simple interest for 3 years.