Simple Interest
Math MCQs

Question :    Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.

Correct Answer  8

Solution & Explanation

Solution

Given,

Principal (P) = $6700

Rate of Simple Interest (R) = 10% per annum

Amount (A) = $12060

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 = $12060 – $6700 = $5360

Thus, Simple Interest = $5360

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 × 5360}/_{6700 × 10}

= ⁵³⁶⁰⁰⁰/₆₇₀₀₀

= 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) = $6700

Rate of Simple Interest (R) = 10% per annum

Simple Interest = $5360 (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 $6700

= ¹⁰/₁₀₀ × 6700

= ^{10 × 6700}/₁₀₀

= ⁶⁷⁰⁰⁰/₁₀₀ = 670

Thus, simple Interest for 1 year = $670

Now,

∵ If the simple Interest is $670, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₆₇₀ years

∴ If the simple Interest is $5360, then the time = ¹/₆₇₀ × 5360 years

= ^{1 × 5360}/₆₇₀ years

= ⁵³⁶⁰/₆₇₀ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9010 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if Richard borrowed a sum of $3600 at 10% simple interest for 3 years.

(3) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?

(4) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 5% simple interest.

(5) Mark had to pay $4796 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 8 years.

(7) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 3 years.

(8) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 3% simple interest?

(9) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?

(10) If Patricia paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.