Simple Interest
Math MCQs

Question :    Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.

Correct Answer  10

Solution & Explanation

Solution

Given,

Principal (P) = $6500

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

Amount (A) = $11050

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 = $11050 – $6500 = $4550

Thus, Simple Interest = $4550

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 × 4550}/_{6500 × 7}

= ⁴⁵⁵⁰⁰⁰/₄₅₅₀₀

= 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) = $6500

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

Simple Interest = $4550 (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 $6500

= ⁷/₁₀₀ × 6500

= ^{7 × 6500}/₁₀₀

= ⁴⁵⁵⁰⁰/₁₀₀ = 455

Thus, simple Interest for 1 year = $455

Now,

∵ If the simple Interest is $455, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₅₅ years

∴ If the simple Interest is $4550, then the time = ¹/₄₅₅ × 4550 years

= ^{1 × 4550}/₄₅₅ years

= ⁴⁵⁵⁰/₄₅₅ = 10 years

Thus, time (T) = 10 years Answer

Similar Questions

(1) Sarah had to pay $4081 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(2) If Nancy paid $4980 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(3) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 8% simple interest.

(4) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 10% simple interest?

(5) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 8 years.

(6) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 5% simple interest.

(7) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 3 years.

(8) Calculate the amount due if William borrowed a sum of $3500 at 2% simple interest for 4 years.

(9) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 7 years.

(10) How much loan did Margaret borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7302.5 to clear it?