Simple Interest
Math MCQs

Question :    William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8150 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $5000

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

Amount (A) = $8150

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 = $8150 – $5000 = $3150

Thus, Simple Interest = $3150

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 × 3150}/_{5000 × 9}

= ³¹⁵⁰⁰⁰/₄₅₀₀₀

= 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) = $5000

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

Simple Interest = $3150 (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 $5000

= ⁹/₁₀₀ × 5000

= ^{9 × 5000}/₁₀₀

= ⁴⁵⁰⁰⁰/₁₀₀ = 450

Thus, simple Interest for 1 year = $450

Now,

∵ If the simple Interest is $450, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₅₀ years

∴ If the simple Interest is $3150, then the time = ¹/₄₅₀ × 3150 years

= ^{1 × 3150}/₄₅₀ years

= ³¹⁵⁰/₄₅₀ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 8% simple interest?

(2) If James borrowed $3000 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(3) Calculate the amount due if Mary borrowed a sum of $3050 at 9% simple interest for 3 years.

(4) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.

(5) How much loan did Barbara borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6105 to clear it?

(6) Thomas had to pay $4142 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(7) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 4% simple interest?

(8) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 6% simple interest?

(9) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 8 years.

(10) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 4 years.