Simple Interest
Math MCQs

Question :    William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.

Correct Answer  10

Solution & Explanation

Solution

Given,

Principal (P) = $5000

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

Amount (A) = $8000

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 = $8000 – $5000 = $3000

Thus, Simple Interest = $3000

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 × 3000}/_{5000 × 6}

= ³⁰⁰⁰⁰⁰/₃₀₀₀₀

= 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) = $5000

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

Simple Interest = $3000 (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 $5000

= ⁶/₁₀₀ × 5000

= ^{6 × 5000}/₁₀₀

= ³⁰⁰⁰⁰/₁₀₀ = 300

Thus, simple Interest for 1 year = $300

Now,

∵ If the simple Interest is $300, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₀₀ years

∴ If the simple Interest is $3000, then the time = ¹/₃₀₀ × 3000 years

= ^{1 × 3000}/₃₀₀ years

= ³⁰⁰⁰/₃₀₀ = 10 years

Thus, time (T) = 10 years Answer

Similar Questions

(1) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 3 years.

(2) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $9548 to clear the loan, then find the time period of the loan.

(3) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $13800 to clear the loan, then find the time period of the loan.

(4) Find the amount to be paid if Joseph borrowed a sum of $5700 at 4% simple interest for 7 years.

(5) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.

(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 4 years.

(7) In how much time a principal of $3150 will amount to $3780 at a simple interest of 4% per annum?

(8) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 2% simple interest.

(9) How much loan did Karen borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7140 to clear it?

(10) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 7% simple interest?