Simple Interest
Math MCQs

Question :    Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.

Correct Answer  10

Solution & Explanation

Solution

Given,

Principal (P) = $5400

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

Amount (A) = $8640

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 = $8640 – $5400 = $3240

Thus, Simple Interest = $3240

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 × 3240}/_{5400 × 6}

= ³²⁴⁰⁰⁰/₃₂₄₀₀

= 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) = $5400

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

Simple Interest = $3240 (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 $5400

= ⁶/₁₀₀ × 5400

= ^{6 × 5400}/₁₀₀

= ³²⁴⁰⁰/₁₀₀ = 324

Thus, simple Interest for 1 year = $324

Now,

∵ If the simple Interest is $324, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₂₄ years

∴ If the simple Interest is $3240, then the time = ¹/₃₂₄ × 3240 years

= ^{1 × 3240}/₃₂₄ years

= ³²⁴⁰/₃₂₄ = 10 years

Thus, time (T) = 10 years Answer

Similar Questions

(1) Calculate the amount due if Thomas borrowed a sum of $3800 at 2% simple interest for 4 years.

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

(3) Barbara had to pay $3976 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(4) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 2% simple interest?

(5) If Steven paid $4968 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(6) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 4 years.

(7) How much loan did Steven borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7590 to clear it?

(8) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 10% simple interest?

(9) How much loan did Melissa borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9187.5 to clear it?

(10) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 3% simple interest for 8 years.