Simple Interest
Math MCQs

Question :    Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9676 to clear the loan, then find the time period of the loan.

Correct Answer  8

Solution & Explanation

Solution

Given,

Principal (P) = $5900

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

Amount (A) = $9676

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 = $9676 – $5900 = $3776

Thus, Simple Interest = $3776

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 × 3776}/_{5900 × 8}

= ³⁷⁷⁶⁰⁰/₄₇₂₀₀

= 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) = $5900

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

Simple Interest = $3776 (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 $5900

= ⁸/₁₀₀ × 5900

= ^{8 × 5900}/₁₀₀

= ⁴⁷²⁰⁰/₁₀₀ = 472

Thus, simple Interest for 1 year = $472

Now,

∵ If the simple Interest is $472, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₇₂ years

∴ If the simple Interest is $3776, then the time = ¹/₄₇₂ × 3776 years

= ^{1 × 3776}/₄₇₂ years

= ³⁷⁷⁶/₄₇₂ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) How much loan did Christopher borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7500 to clear it?

(2) How much loan did Deborah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8195 to clear it?

(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 7 years.

(4) Find the amount to be paid if James borrowed a sum of $5000 at 4% simple interest for 7 years.

(5) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 8 years.

(6) What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?

(7) If Robert borrowed $3100 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(8) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.

(9) Margaret had to pay $4872 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(10) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 7 years.