Simple Interest
Math MCQs

Question :    James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.

Correct Answer  10

Solution & Explanation

Solution

Given,

Principal (P) = $4000

Rate of Simple Interest (R) = 10% per annum

Amount (A) = $8000

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 = $8000 – $4000 = $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}/_{4000 × 10}

= 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) = $4000

Rate of Simple Interest (R) = 10% 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 = 10% of Principal

= 10% of $4000

= ¹⁰/₁₀₀ × 4000

= ^{10 × 4000}/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) What amount will be due after 2 years if James borrowed a sum of $3000 at a 8% simple interest?

(2) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.

(3) Ashley had to pay $5096 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(4) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $8624 to clear the loan, then find the time period of the loan.

(5) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6216 to clear the loan, then find the time period of the loan.

(6) Kimberly had to pay $5347.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(7) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 5% simple interest?

(8) How much loan did Kevin borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8875 to clear it?

(9) Find the amount to be paid if Mary borrowed a sum of $5050 at 9% simple interest for 7 years.

(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 6% simple interest for 7 years.