Question:
Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $6532 to clear the loan, then find the time period of the loan.
Correct Answer
6
Solution And Explanation
Solution
Given,
Principal (P) = $4600
Rate of Simple Interest (R) = 7% per annum
Amount (A) = $6532
Thus, time (T) = ?
Method (1) Using Formula
Calculation of Simple Interest, when Principal and Amount are givenFormual 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 = $6532 – $4600 = $1932
Thus, Simple Interest = $1932
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 × 1932/4600 × 7
= 193200/32200
= 6 years (using formula)
Thus, Time (T) = 6 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) = $4600
Rate of Simple Interest (R) = 7% per annum
Simple Interest = $1932 (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 $4600
= 7/100 × 4600
= 7 × 4600/100
= 32200/100 = 322
Thus, simple Interest for 1 year = $322
Now,
∵ If the simple Interest is $322, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/322 years
∴ If the simple Interest is $1932, then the time = 1/322 × 1932 years
= 1 × 1932/322 years
= 1932/322 = 6 years
Thus, time (T) = 6 years Answer
Similar Questions
(1) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 8% simple interest.
(2) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6160 to clear the loan, then find the time period of the loan.
(3) If Linda borrowed $3350 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 4% simple interest?
(5) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10824 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Mary borrowed a sum of $5050 at 9% simple interest for 8 years.
(7) How much loan did Mary borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5555 to clear it?
(8) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11050 to clear the loan, then find the time period of the loan.
(9) What amount does William have to pay after 5 years if he takes a loan of $3500 at 2% simple interest?
(10) If Steven paid $4968 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.