Simple Interest
Math MCQs

Question :    Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $12420 to clear the loan, then find the time period of the loan.

Correct Answer  8

Solution & Explanation

Solution

Given,

Principal (P) = $6900

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

Amount (A) = $12420

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 = $12420 – $6900 = $5520

Thus, Simple Interest = $5520

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 × 5520}/_{6900 × 10}

= ⁵⁵²⁰⁰⁰/₆₉₀₀₀

= 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) = $6900

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

Simple Interest = $5520 (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 $6900

= ¹⁰/₁₀₀ × 6900

= ^{10 × 6900}/₁₀₀

= ⁶⁹⁰⁰⁰/₁₀₀ = 690

Thus, simple Interest for 1 year = $690

Now,

∵ If the simple Interest is $690, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₆₉₀ years

∴ If the simple Interest is $5520, then the time = ¹/₆₉₀ × 5520 years

= ^{1 × 5520}/₆₉₀ years

= ⁵⁵²⁰/₆₉₀ = 8 years

Thus, time (T) = 8 years Answer

Similar Questions

(1) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 2% simple interest.

(2) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.

(3) Find the amount to be paid if Christopher borrowed a sum of $6000 at 3% simple interest for 8 years.

(4) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.

(5) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7912 to clear the loan, then find the time period of the loan.

(6) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 5% simple interest?

(7) Patricia had to pay $3528 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(8) How much loan did Steven borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7920 to clear it?

(9) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 4 years.

(10) Find the amount to be paid if Mary borrowed a sum of $5050 at 9% simple interest for 7 years.