Simple Interest
Math MCQs

Question :    James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $6400 to clear the loan, then find the time period of the loan.

Correct Answer  10

Solution & Explanation

Solution

Given,

Principal (P) = $4000

Rate of Simple Interest (R) = 6% per annum

Amount (A) = $6400

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 = $6400 – $4000 = $2400

Thus, Simple Interest = $2400

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 × 2400}/_{4000 × 6}

= ²⁴⁰⁰⁰⁰/₂₄₀₀₀

= 10 years (using formula)

Thus, Time (T) = 10 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) = 6% per annum

Simple Interest = $2400 (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 = 6% of Principal

= 6% of $4000

= ⁶/₁₀₀ × 4000

= ^{6 × 4000}/₁₀₀

= ²⁴⁰⁰⁰/₁₀₀ = 240

Thus, simple Interest for 1 year = $240

Now,

∵ If the simple Interest is $240, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₂₄₀ years

∴ If the simple Interest is $2400, then the time = ¹/₂₄₀ × 2400 years

= ^{1 × 2400}/₂₄₀ years

= ²⁴⁰⁰/₂₄₀ = 10 years

Thus, time (T) = 10 years Answer

Similar Questions

(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 7% simple interest for 3 years.

(2) What amount does William have to pay after 5 years if he takes a loan of $3500 at 3% simple interest?

(3) How much loan did Paul borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8040 to clear it?

(4) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 5% simple interest?

(5) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $11340 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 5% simple interest.

(7) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.

(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 8 years.

(9) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 4% simple interest.

(10) How much loan did Mary borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6060 to clear it?