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) 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?

(2) How much loan did Patricia borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6437.5 to clear it?

(3) Kimberly had to pay $4929 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(4) How much loan did Brian borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7920 to clear it?

(5) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 8 years.

(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 8 years.

(7) Calculate the amount due if James borrowed a sum of $3000 at 4% simple interest for 3 years.

(8) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 5% simple interest?

(9) Calculate the amount due if David borrowed a sum of $3400 at 3% simple interest for 3 years.

(10) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.