mcqs Math Simple Interest Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan. 7280

Question: Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.

(A)  4.5
(B)  7.5
(C)  6
(D)  9

Correct Answer 6

Solution And Explanation

Solution

Given,

Principal (P) = $4600

Rate of Simple Interest (R) = 6% per annum

Amount (A) = $6256

Thus, time (T) = ?

Method (1) Using Formula

We know that, Amount (A) = Principal (P) + Simple Interest (SI)

⇒ Simple Interest (SI) = Amount – Principal

⇒ SI = $6256 – $4600 = $1656

Thus, Simple Interest = $1656

Time (T) = ^{100 × Simple Interest}/_{Principal × Rate of Interest}

⇒ T = ^{100 × SI}/_{P × R}

Thus, Time (T) = ^{100 × 1656}/_{4600 × 6}

= ¹⁶⁵⁶⁰⁰/₂₇₆₀₀

= 6 years (using formula)

Thus, Time (T) = 6 years (from time taken before calculation)Answer

Here, we have

Principal (P) = $4600

Rate of Simple Interest (R) = 6% per annum

Simple Interest = $1656 (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 = 6% of Principal

= 6% of $4600

= ⁶/₁₀₀ × 4600

= ^{6 × 4600}/₁₀₀

= ²⁷⁶⁰⁰/₁₀₀ = 276

Thus, simple Interest for 1 year = $276

Now,

∵ If the simple Interest is $276, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₂₇₆ years

∴ If the simple Interest is $1656, then the time = ¹/₂₇₆ × 1656 years

= ^{1 × 1656}/₂₇₆ years

= ¹⁶⁵⁶/₂₇₆ = 6 years

Thus, time (T) = 6 years Answer