Simple Interest
Math MCQs

Question :    Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.

Correct Answer  8

Solution & Explanation

Solution

Given,

Principal (P) = $5400

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

Amount (A) = $8424

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 = $8424 – $5400 = $3024

Thus, Simple Interest = $3024

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 × 3024}/_{5400 × 7}

= ³⁰²⁴⁰⁰/₃₇₈₀₀

= 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) = $5400

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

Simple Interest = $3024 (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 $5400

= ⁷/₁₀₀ × 5400

= ^{7 × 5400}/₁₀₀

= ³⁷⁸⁰⁰/₁₀₀ = 378

Thus, simple Interest for 1 year = $378

Now,

∵ If the simple Interest is $378, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₇₈ years

∴ If the simple Interest is $3024, then the time = ¹/₃₇₈ × 3024 years

= ^{1 × 3024}/₃₇₈ years

= ³⁰²⁴/₃₇₈ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) Steven had to pay $5290 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(2) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $11880 to clear the loan, then find the time period of the loan.

(3) How much loan did Amanda borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8580 to clear it?

(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.

(5) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.

(6) Mary took a loan of $4100 at the rate of 6% simple interest per annum. If he paid an amount of $5576 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 6% simple interest.

(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 8 years.

(9) How much loan did Karen borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7437.5 to clear it?

(10) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 5% simple interest.