Simple Interest
Math MCQs

Question :    Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.

Correct Answer  8

Solution & Explanation

Solution

Given,

Principal (P) = $4600

Rate of Simple Interest (R) = 7% per annum

Amount (A) = $7176

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 = $7176 – $4600 = $2576

Thus, Simple Interest = $2576

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 × 2576}/_{4600 × 7}

= ²⁵⁷⁶⁰⁰/₃₂₂₀₀

= 8 years (using formula)

Thus, Time (T) = 8 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) = 7% per annum

Simple Interest = $2576 (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 = 7% of Principal

= 7% of $4600

= ⁷/₁₀₀ × 4600

= ^{7 × 4600}/₁₀₀

= ³²²⁰⁰/₁₀₀ = 322

Thus, simple Interest for 1 year = $322

Now,

∵ If the simple Interest is $322, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₂₂ years

∴ If the simple Interest is $2576, then the time = ¹/₃₂₂ × 2576 years

= ^{1 × 2576}/₃₂₂ years

= ²⁵⁷⁶/₃₂₂ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) Lisa had to pay $4293 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(2) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $9200 to clear the loan, then find the time period of the loan.

(3) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.

(4) What amount does David have to pay after 6 years if he takes a loan of $3400 at 2% simple interest?

(5) How much loan did Edward borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8740 to clear it?

(6) Find the amount to be paid if Susan borrowed a sum of $5650 at 6% simple interest for 7 years.

(7) Find the amount to be paid if Jessica borrowed a sum of $5750 at 6% simple interest for 8 years.

(8) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 9% simple interest?

(9) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if Patricia borrowed a sum of $3150 at 9% simple interest for 4 years.