Simple Interest
Math MCQs

Question :    William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8500 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) = 7% per annum

Amount (A) = $8500

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 = $8500 – $5000 = $3500

Thus, Simple Interest = $3500

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 × 3500}/_{5000 × 7}

= ³⁵⁰⁰⁰⁰/₃₅₀₀₀

= 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) = 7% per annum

Simple Interest = $3500 (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 $5000

= ⁷/₁₀₀ × 5000

= ^{7 × 5000}/₁₀₀

= ³⁵⁰⁰⁰/₁₀₀ = 350

Thus, simple Interest for 1 year = $350

Now,

∵ If the simple Interest is $350, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₅₀ years

∴ If the simple Interest is $3500, then the time = ¹/₃₅₀ × 3500 years

= ^{1 × 3500}/₃₅₀ years

= ³⁵⁰⁰/₃₅₀ = 10 years

Thus, time (T) = 10 years Answer

Similar Questions

(1) How much loan did Susan borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7062.5 to clear it?

(2) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9454 to clear the loan, then find the time period of the loan.

(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 7% simple interest?

(4) Steven had to pay $5290 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(5) Paul had to pay $5405 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(6) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(7) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 3 years.

(8) Jennifer had to pay $3542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(9) In how much time a principal of $3000 will amount to $3180 at a simple interest of 2% per annum?

(10) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.