Simple Interest
Math MCQs

Question :    Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $10660 to clear the loan, then find the time period of the loan.

Correct Answer  8

Solution & Explanation

Solution

Given,

Principal (P) = $6500

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

Amount (A) = $10660

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 = $10660 – $6500 = $4160

Thus, Simple Interest = $4160

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 × 4160}/_{6500 × 8}

= ⁴¹⁶⁰⁰⁰/₅₂₀₀₀

= 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) = $6500

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

Simple Interest = $4160 (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 $6500

= ⁸/₁₀₀ × 6500

= ^{8 × 6500}/₁₀₀

= ⁵²⁰⁰⁰/₁₀₀ = 520

Thus, simple Interest for 1 year = $520

Now,

∵ If the simple Interest is $520, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₅₂₀ years

∴ If the simple Interest is $4160, then the time = ¹/₅₂₀ × 4160 years

= ^{1 × 4160}/₅₂₀ years

= ⁴¹⁶⁰/₅₂₀ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 8% simple interest.

(2) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $9943 to clear the loan, then find the time period of the loan.

(3) Find the amount to be paid if Karen borrowed a sum of $5950 at 8% simple interest for 8 years.

(4) James had to pay $3450 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(5) If Susan paid $4234 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(6) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7748 to clear the loan, then find the time period of the loan.

(7) William had to pay $3710 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(8) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.

(9) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 3 years.

(10) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 3 years.