Simple Interest
Math MCQs

Question :    William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $8600 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) = 9% per annum

Amount (A) = $8600

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 = $8600 – $5000 = $3600

Thus, Simple Interest = $3600

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 × 3600}/_{5000 × 9}

= ³⁶⁰⁰⁰⁰/₄₅₀₀₀

= 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) = 9% per annum

Simple Interest = $3600 (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 = 9% of Principal

= 9% of $5000

= ⁹/₁₀₀ × 5000

= ^{9 × 5000}/₁₀₀

= ⁴⁵⁰⁰⁰/₁₀₀ = 450

Thus, simple Interest for 1 year = $450

Now,

∵ If the simple Interest is $450, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₅₀ years

∴ If the simple Interest is $3600, then the time = ¹/₄₅₀ × 3600 years

= ^{1 × 3600}/₄₅₀ years

= ³⁶⁰⁰/₄₅₀ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $7650 to clear the loan, then find the time period of the loan.

(2) Joseph had to pay $4255 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(3) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $10318 to clear the loan, then find the time period of the loan.

(4) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8520 to clear the loan, then find the time period of the loan.

(5) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7700 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 10% simple interest.

(7) If Charles borrowed $3900 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(8) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 10% simple interest for 7 years.

(9) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $9920 to clear the loan, then find the time period of the loan.

(10) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8856 to clear the loan, then find the time period of the loan.