Simple Interest
Math MCQs

Question :    James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 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) = 9% per annum

Amount (A) = $6520

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 = $6520 – $4000 = $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}/_{4000 × 9}

= 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) = $4000

Rate of Simple Interest (R) = 9% 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 = 9% of Principal

= 9% of $4000

= ⁹/₁₀₀ × 4000

= ^{9 × 4000}/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) John had to pay $3392 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(2) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.

(3) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 3% simple interest.

(4) How much loan did William borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6600 to clear it?

(5) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 4 years.

(7) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $9387 to clear the loan, then find the time period of the loan.

(8) What amount does James have to pay after 5 years if he takes a loan of $3000 at 2% simple interest?

(9) Find the amount to be paid if Robert borrowed a sum of $5100 at 7% simple interest for 7 years.

(10) What amount does William have to pay after 5 years if he takes a loan of $3500 at 4% simple interest?