Simple Interest
Math MCQs

Question :    David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $8640 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) = 10% per annum

Amount (A) = $8640

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 = $8640 – $4800 = $3840

Thus, Simple Interest = $3840

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 × 3840}/_{4800 × 10}

= ³⁸⁴⁰⁰⁰/₄₈₀₀₀

= 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) = 10% per annum

Simple Interest = $3840 (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 = 10% of Principal

= 10% of $4800

= ¹⁰/₁₀₀ × 4800

= ^{10 × 4800}/₁₀₀

= ⁴⁸⁰⁰⁰/₁₀₀ = 480

Thus, simple Interest for 1 year = $480

Now,

∵ If the simple Interest is $480, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₈₀ years

∴ If the simple Interest is $3840, then the time = ¹/₄₈₀ × 3840 years

= ^{1 × 3840}/₄₈₀ years

= ³⁸⁴⁰/₄₈₀ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.

(2) Find the amount to be paid if Linda borrowed a sum of $5350 at 3% simple interest for 8 years.

(3) Michelle had to pay $5692.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(4) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.

(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 6% simple interest for 4 years.

(6) In how much time a principal of $3000 will amount to $3600 at a simple interest of 4% per annum?

(7) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.

(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 3 years.

(9) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $9916 to clear the loan, then find the time period of the loan.

(10) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?