Simple Interest
Math MCQs

Question :    Jennifer took a loan of $4500 at the rate of 8% simple interest per annum. If he paid an amount of $7380 to clear the loan, then find the time period of the loan.

Correct Answer  8

Solution & Explanation

Solution

Given,

Principal (P) = $4500

Rate of Simple Interest (R) = 8% per annum

Amount (A) = $7380

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 = $7380 – $4500 = $2880

Thus, Simple Interest = $2880

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 × 2880}/_{4500 × 8}

= ²⁸⁸⁰⁰⁰/₃₆₀₀₀

= 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) = $4500

Rate of Simple Interest (R) = 8% per annum

Simple Interest = $2880 (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 = 8% of Principal

= 8% of $4500

= ⁸/₁₀₀ × 4500

= ^{8 × 4500}/₁₀₀

= ³⁶⁰⁰⁰/₁₀₀ = 360

Thus, simple Interest for 1 year = $360

Now,

∵ If the simple Interest is $360, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₆₀ years

∴ If the simple Interest is $2880, then the time = ¹/₃₆₀ × 2880 years

= ^{1 × 2880}/₃₆₀ years

= ²⁸⁸⁰/₃₆₀ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $9028 to clear the loan, then find the time period of the loan.

(2) Joseph had to pay $4033 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(3) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.

(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.

(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 10% simple interest for 8 years.

(6) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9360 to clear it?

(7) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 2% simple interest.

(8) Daniel had to pay $4715 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(9) 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.

(10) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 6% simple interest?