Simple Interest
Math MCQs

Question :    David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.

Correct Answer  10

Solution & Explanation

Solution

Given,

Principal (P) = $4800

Rate of Simple Interest (R) = 7% per annum

Amount (A) = $8160

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 = $8160 – $4800 = $3360

Thus, Simple Interest = $3360

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 × 3360}/_{4800 × 7}

= ³³⁶⁰⁰⁰/₃₃₆₀₀

= 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) = $4800

Rate of Simple Interest (R) = 7% per annum

Simple Interest = $3360 (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 = 7% of Principal

= 7% of $4800

= ⁷/₁₀₀ × 4800

= ^{7 × 4800}/₁₀₀

= ³³⁶⁰⁰/₁₀₀ = 336

Thus, simple Interest for 1 year = $336

Now,

∵ If the simple Interest is $336, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₃₆ years

∴ If the simple Interest is $3360, then the time = ¹/₃₃₆ × 3360 years

= ^{1 × 3360}/₃₃₆ years

= ³³⁶⁰/₃₃₆ = 10 years

Thus, time (T) = 10 years Answer

Similar Questions

(1) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 7 years.

(2) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 6% simple interest?

(3) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 6% simple interest.

(4) How much loan did Patricia borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5665 to clear it?

(5) If David borrowed $3400 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(6) If Michelle paid $5346 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(7) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 2% simple interest?

(8) Calculate the amount due if Charles borrowed a sum of $3900 at 8% simple interest for 4 years.

(9) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11180 to clear the loan, then find the time period of the loan.

(10) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 10% simple interest?