Simple Interest
Math MCQs

Question :    Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $6700

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

Amount (A) = $10921

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 = $10921 – $6700 = $4221

Thus, Simple Interest = $4221

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 × 4221}/_{6700 × 9}

= ⁴²²¹⁰⁰/₆₀₃₀₀

= 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) = $6700

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

Simple Interest = $4221 (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 $6700

= ⁹/₁₀₀ × 6700

= ^{9 × 6700}/₁₀₀

= ⁶⁰³⁰⁰/₁₀₀ = 603

Thus, simple Interest for 1 year = $603

Now,

∵ If the simple Interest is $603, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₆₀₃ years

∴ If the simple Interest is $4221, then the time = ¹/₆₀₃ × 4221 years

= ^{1 × 4221}/₆₀₃ years

= ⁴²²¹/₆₀₃ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 4% simple interest?

(2) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 8% simple interest.

(3) How much loan did Thomas borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6380 to clear it?

(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.

(5) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 4 years.

(6) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.

(7) 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.

(8) How much loan did Michael borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6625 to clear it?

(9) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.

(10) How much loan did John borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6240 to clear it?