Simple Interest
Math MCQs

Question :    William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.

Correct Answer  8

Solution & Explanation

Solution

Given,

Principal (P) = $5000

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

Amount (A) = $8200

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 = $8200 – $5000 = $3200

Thus, Simple Interest = $3200

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 × 3200}/_{5000 × 8}

= ³²⁰⁰⁰⁰/₄₀₀₀₀

= 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) = $5000

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

Simple Interest = $3200 (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 $5000

= ⁸/₁₀₀ × 5000

= ^{8 × 5000}/₁₀₀

= ⁴⁰⁰⁰⁰/₁₀₀ = 400

Thus, simple Interest for 1 year = $400

Now,

∵ If the simple Interest is $400, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₀₀ years

∴ If the simple Interest is $3200, then the time = ¹/₄₀₀ × 3200 years

= ^{1 × 3200}/₄₀₀ years

= ³²⁰⁰/₄₀₀ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 8% simple interest.

(2) John took a loan of $4400 at the rate of 6% simple interest per annum. If he paid an amount of $6776 to clear the loan, then find the time period of the loan.

(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 4% simple interest for 7 years.

(4) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.

(5) If Richard paid $4320 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(6) Calculate the amount due if Christopher borrowed a sum of $4000 at 5% simple interest for 3 years.

(7) How much loan did William borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6050 to clear it?

(8) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 2% simple interest.

(9) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 3% per annum?

(10) John had to pay $3488 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.