Simple Interest
Math MCQs

Question :    Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $7000

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

Amount (A) = $11410

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 = $11410 – $7000 = $4410

Thus, Simple Interest = $4410

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 × 4410}/_{7000 × 9}

= ⁴⁴¹⁰⁰⁰/₆₃₀₀₀

= 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) = $7000

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

Simple Interest = $4410 (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 $7000

= ⁹/₁₀₀ × 7000

= ^{9 × 7000}/₁₀₀

= ⁶³⁰⁰⁰/₁₀₀ = 630

Thus, simple Interest for 1 year = $630

Now,

∵ If the simple Interest is $630, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₆₃₀ years

∴ If the simple Interest is $4410, then the time = ¹/₆₃₀ × 4410 years

= ^{1 × 4410}/₆₃₀ years

= ⁴⁴¹⁰/₆₃₀ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 10% simple interest.

(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 10% simple interest for 4 years.

(3) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $10600 to clear the loan, then find the time period of the loan.

(4) If David borrowed $3400 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(5) Richard had to pay $3816 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(6) If Sandra paid $4806 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(7) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 3 years.

(8) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.

(9) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $7172 to clear the loan, then find the time period of the loan.

(10) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.