Simple Interest
Math MCQs

Question :    Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $8326 to clear the loan, then find the time period of the loan.

Correct Answer  9

Solution & Explanation

Solution

Given,

Principal (P) = $4600

Rate of Simple Interest (R) = 9% per annum

Amount (A) = $8326

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 = $8326 – $4600 = $3726

Thus, Simple Interest = $3726

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 × 3726}/_{4600 × 9}

= ³⁷²⁶⁰⁰/₄₁₄₀₀

= 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) = $4600

Rate of Simple Interest (R) = 9% per annum

Simple Interest = $3726 (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 = 9% of Principal

= 9% of $4600

= ⁹/₁₀₀ × 4600

= ^{9 × 4600}/₁₀₀

= ⁴¹⁴⁰⁰/₁₀₀ = 414

Thus, simple Interest for 1 year = $414

Now,

∵ If the simple Interest is $414, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₁₄ years

∴ If the simple Interest is $3726, then the time = ¹/₄₁₄ × 3726 years

= ^{1 × 3726}/₄₁₄ years

= ³⁷²⁶/₄₁₄ = 9 years

Thus, time (T) = 9 years Answer

Similar Questions

(1) If Richard paid $4032 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(2) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 10% simple interest?

(3) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(4) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 6% simple interest?

(5) How much loan did Christopher borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7200 to clear it?

(6) Linda had to pay $3551 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(7) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 4 years.

(8) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 3% simple interest.

(9) Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 4 years.

(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 9% simple interest for 8 years.