Simple Interest
Math MCQs

Question :    Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution & Explanation

Solution

Given,

Principal (P) = $5800

Rate of Simple Interest (R) = 10% per annum

Amount (A) = $9860

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 = $9860 – $5800 = $4060

Thus, Simple Interest = $4060

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 × 4060}/_{5800 × 10}

= ⁴⁰⁶⁰⁰⁰/₅₈₀₀₀

= 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) = $5800

Rate of Simple Interest (R) = 10% per annum

Simple Interest = $4060 (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 = 10% of Principal

= 10% of $5800

= ¹⁰/₁₀₀ × 5800

= ^{10 × 5800}/₁₀₀

= ⁵⁸⁰⁰⁰/₁₀₀ = 580

Thus, simple Interest for 1 year = $580

Now,

∵ If the simple Interest is $580, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₅₈₀ years

∴ If the simple Interest is $4060, then the time = ¹/₅₈₀ × 4060 years

= ^{1 × 4060}/₅₈₀ years

= ⁴⁰⁶⁰/₅₈₀ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) How much loan did James borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6250 to clear it?

(2) Paul had to pay $4982 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(3) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.

(4) If John paid $3712 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(5) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 3 years.

(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 7% simple interest for 8 years.

(7) What amount does John have to pay after 5 years if he takes a loan of $3200 at 3% simple interest?

(8) Karen had to pay $4424 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(9) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 4% simple interest for 4 years.

(10) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 3 years.