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) How much loan did Susan borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6497.5 to clear it?

(2) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7748 to clear the loan, then find the time period of the loan.

(3) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $6552 to clear the loan, then find the time period of the loan.

(4) How much loan did Melissa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8085 to clear it?

(5) Calculate the amount due if Susan borrowed a sum of $3650 at 3% simple interest for 4 years.

(6) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.

(7) Calculate the amount due if Linda borrowed a sum of $3350 at 8% simple interest for 4 years.

(8) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $5960 to clear the loan, then find the time period of the loan.

(9) What amount does David have to pay after 5 years if he takes a loan of $3400 at 6% simple interest?

(10) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.