Simple Interest
Math MCQs

Question :    James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.

Correct Answer  9

Solution & Explanation

Solution

Given,

Principal (P) = $4000

Rate of Simple Interest (R) = 7% per annum

Amount (A) = $6520

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 = $6520 – $4000 = $2520

Thus, Simple Interest = $2520

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 × 2520}/_{4000 × 7}

= ²⁵²⁰⁰⁰/₂₈₀₀₀

= 9 years (using formula)

Thus, Time (T) = 9 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) = $4000

Rate of Simple Interest (R) = 7% per annum

Simple Interest = $2520 (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 = 7% of Principal

= 7% of $4000

= ⁷/₁₀₀ × 4000

= ^{7 × 4000}/₁₀₀

= ²⁸⁰⁰⁰/₁₀₀ = 280

Thus, simple Interest for 1 year = $280

Now,

∵ If the simple Interest is $280, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₂₈₀ years

∴ If the simple Interest is $2520, then the time = ¹/₂₈₀ × 2520 years

= ^{1 × 2520}/₂₈₀ years

= ²⁵²⁰/₂₈₀ = 9 years

Thus, time (T) = 9 years Answer

Similar Questions

(1) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 10% simple interest?

(2) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 3 years.

(3) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 8% simple interest?

(4) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 8 years.

(5) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 10% simple interest?

(6) If Kimberly paid $5394 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

(7) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.

(8) How much loan did Donald borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7475 to clear it?

(9) Find the amount to be paid if Mary borrowed a sum of $5050 at 3% simple interest for 7 years.

(10) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 4% simple interest.