Simple Interest
Math MCQs

Question :    David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $8256 to clear the loan, then find the time period of the loan.

Correct Answer  9

Solution & Explanation

Solution

Given,

Principal (P) = $4800

Rate of Simple Interest (R) = 8% per annum

Amount (A) = $8256

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 = $8256 – $4800 = $3456

Thus, Simple Interest = $3456

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 × 3456}/_{4800 × 8}

= ³⁴⁵⁶⁰⁰/₃₈₄₀₀

= 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) = $4800

Rate of Simple Interest (R) = 8% per annum

Simple Interest = $3456 (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 = 8% of Principal

= 8% of $4800

= ⁸/₁₀₀ × 4800

= ^{8 × 4800}/₁₀₀

= ³⁸⁴⁰⁰/₁₀₀ = 384

Thus, simple Interest for 1 year = $384

Now,

∵ If the simple Interest is $384, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₈₄ years

∴ If the simple Interest is $3456, then the time = ¹/₃₈₄ × 3456 years

= ^{1 × 3456}/₃₈₄ years

= ³⁴⁵⁶/₃₈₄ = 9 years

Thus, time (T) = 9 years Answer

Similar Questions

(1) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.

(2) What amount does John have to pay after 6 years if he takes a loan of $3200 at 3% simple interest?

(3) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 2% simple interest.

(4) Calculate the amount due if Patricia borrowed a sum of $3150 at 7% simple interest for 3 years.

(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 3% simple interest for 8 years.

(6) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 3% simple interest?

(7) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.

(8) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7920 to clear the loan, then find the time period of the loan.

(9) Thomas had to pay $4028 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(10) What amount does William have to pay after 5 years if he takes a loan of $3500 at 8% simple interest?