Simple Interest
Math MCQs

Question :    Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7498 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $4600

Rate of Simple Interest (R) = 9% per annum

Amount (A) = $7498

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 = $7498 – $4600 = $2898

Thus, Simple Interest = $2898

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 × 2898}/_{4600 × 9}

= ²⁸⁹⁸⁰⁰/₄₁₄₀₀

= 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) = $4600

Rate of Simple Interest (R) = 9% per annum

Simple Interest = $2898 (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 $4600

= ⁹/₁₀₀ × 4600

= ^{9 × 4600}/₁₀₀

= ⁴¹⁴⁰⁰/₁₀₀ = 414

Thus, simple Interest for 1 year = $414

Now,

∵ If the simple Interest is $414, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₁₄ years

∴ If the simple Interest is $2898, then the time = ¹/₄₁₄ × 2898 years

= ^{1 × 2898}/₄₁₄ years

= ²⁸⁹⁸/₄₁₄ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 7% simple interest for 7 years.

(2) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 7% simple interest.

(3) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.

(4) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $9384 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due if James borrowed a sum of $3000 at 5% simple interest for 4 years.

(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 8% simple interest for 8 years.

(7) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10010 to clear the loan, then find the time period of the loan.

(8) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 8% simple interest?

(9) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 7% simple interest?

(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 7 years.