Simple Interest
Math MCQs

Question :    James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $4000

Rate of Simple Interest (R) = 8% per annum

Amount (A) = $6240

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 = $6240 – $4000 = $2240

Thus, Simple Interest = $2240

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 × 2240}/_{4000 × 8}

= ²²⁴⁰⁰⁰/₃₂₀₀₀

= 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) = $4000

Rate of Simple Interest (R) = 8% per annum

Simple Interest = $2240 (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 = 8% of Principal

= 8% of $4000

= ⁸/₁₀₀ × 4000

= ^{8 × 4000}/₁₀₀

= ³²⁰⁰⁰/₁₀₀ = 320

Thus, simple Interest for 1 year = $320

Now,

∵ If the simple Interest is $320, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₂₀ years

∴ If the simple Interest is $2240, then the time = ¹/₃₂₀ × 2240 years

= ^{1 × 2240}/₃₂₀ years

= ²²⁴⁰/₃₂₀ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.

(2) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8550 to clear the loan, then find the time period of the loan.

(3) How much loan did Timothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8140 to clear it?

(4) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 2% simple interest for 4 years.

(6) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6120 to clear the loan, then find the time period of the loan.

(7) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 8 years.

(8) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6300 to clear it?

(9) If Emily paid $5510 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(10) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.