Simple Interest
Math MCQs

Question :    William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $9000 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) = 8% per annum

Amount (A) = $9000

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 = $9000 – $5000 = $4000

Thus, Simple Interest = $4000

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 × 4000}/_{5000 × 8}

= ⁴⁰⁰⁰⁰⁰/₄₀₀₀₀

= 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) = 8% per annum

Simple Interest = $4000 (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 = 8% of Principal

= 8% of $5000

= ⁸/₁₀₀ × 5000

= ^{8 × 5000}/₁₀₀

= ⁴⁰⁰⁰⁰/₁₀₀ = 400

Thus, simple Interest for 1 year = $400

Now,

∵ If the simple Interest is $400, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₀₀ years

∴ If the simple Interest is $4000, then the time = ¹/₄₀₀ × 4000 years

= ^{1 × 4000}/₄₀₀ years

= ⁴⁰⁰⁰/₄₀₀ = 10 years

Thus, time (T) = 10 years Answer

Similar Questions

(1) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9412 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 5% simple interest for 3 years.

(3) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 4 years.

(4) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 4 years.

(5) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.

(6) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 9% simple interest?

(7) How much loan did Susan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6215 to clear it?

(8) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 3 years.

(9) If Richard paid $3888 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(10) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $8162 to clear the loan, then find the time period of the loan.