Simple Interest
Math MCQs

Question :    Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $9828 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $6300

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

Amount (A) = $9828

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 = $9828 – $6300 = $3528

Thus, Simple Interest = $3528

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 × 3528}/_{6300 × 8}

= ³⁵²⁸⁰⁰/₅₀₄₀₀

= 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) = $6300

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

Simple Interest = $3528 (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 $6300

= ⁸/₁₀₀ × 6300

= ^{8 × 6300}/₁₀₀

= ⁵⁰⁴⁰⁰/₁₀₀ = 504

Thus, simple Interest for 1 year = $504

Now,

∵ If the simple Interest is $504, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₅₀₄ years

∴ If the simple Interest is $3528, then the time = ¹/₅₀₄ × 3528 years

= ^{1 × 3528}/₅₀₄ years

= ³⁵²⁸/₅₀₄ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) What amount does John have to pay after 5 years if he takes a loan of $3200 at 8% simple interest?

(2) What amount will be due after 2 years if James borrowed a sum of $3000 at a 4% simple interest?

(3) How much loan did David borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6750 to clear it?

(4) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 3 years.

(5) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 8 years.

(6) If John paid $3712 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(7) Find the amount to be paid if James borrowed a sum of $5000 at 6% simple interest for 7 years.

(8) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 6% simple interest?

(9) Michelle had to pay $5544 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(10) Nancy had to pay $4648 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.