Simple Interest
Math MCQs

Question :    Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $10880 to clear the loan, then find the time period of the loan.

Correct Answer  10

Solution & Explanation

Solution

Given,

Principal (P) = $6400

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

Amount (A) = $10880

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 = $10880 – $6400 = $4480

Thus, Simple Interest = $4480

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 × 4480}/_{6400 × 7}

= ⁴⁴⁸⁰⁰⁰/₄₄₈₀₀

= 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) = $6400

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

Simple Interest = $4480 (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 $6400

= ⁷/₁₀₀ × 6400

= ^{7 × 6400}/₁₀₀

= ⁴⁴⁸⁰⁰/₁₀₀ = 448

Thus, simple Interest for 1 year = $448

Now,

∵ If the simple Interest is $448, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₄₈ years

∴ If the simple Interest is $4480, then the time = ¹/₄₄₈ × 4480 years

= ^{1 × 4480}/₄₄₈ years

= ⁴⁴⁸⁰/₄₄₈ = 10 years

Thus, time (T) = 10 years Answer

Similar Questions

(1) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 8% simple interest?

(2) Michael had to pay $3795 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(3) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.

(4) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 6% simple interest?

(5) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(6) In how much time a principal of $3150 will amount to $3402 at a simple interest of 2% per annum?

(7) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 4 years.

(8) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5995 to clear it?

(9) If David paid $3808 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(10) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $11041 to clear the loan, then find the time period of the loan.