Simple Interest
Math MCQs

Question :    David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7872 to clear the loan, then find the time period of the loan.

Correct Answer  8

Solution & Explanation

Solution

Given,

Principal (P) = $4800

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

Amount (A) = $7872

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 = $7872 – $4800 = $3072

Thus, Simple Interest = $3072

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 × 3072}/_{4800 × 8}

= ³⁰⁷²⁰⁰/₃₈₄₀₀

= 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) = $4800

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

Simple Interest = $3072 (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 $4800

= ⁸/₁₀₀ × 4800

= ^{8 × 4800}/₁₀₀

= ³⁸⁴⁰⁰/₁₀₀ = 384

Thus, simple Interest for 1 year = $384

Now,

∵ If the simple Interest is $384, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₈₄ years

∴ If the simple Interest is $3072, then the time = ¹/₃₈₄ × 3072 years

= ^{1 × 3072}/₃₈₄ years

= ³⁰⁷²/₃₈₄ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 3 years.

(2) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11222 to clear the loan, then find the time period of the loan.

(3) If Joseph paid $4440 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 9% simple interest?

(5) James had to pay $3360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(6) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 4% simple interest?

(7) William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $7450 to clear the loan, then find the time period of the loan.

(8) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8288 to clear the loan, then find the time period of the loan.

(9) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.

(10) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.