Question:
James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
Correct Answer
6
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $5920
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 = $5920 – $4000 = $1920
Thus, Simple Interest = $1920
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 × 1920/4000 × 8
= 192000/32000
= 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) = $4000
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $1920 (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 $4000
= 8/100 × 4000
= 8 × 4000/100
= 32000/100 = 320
Thus, simple Interest for 1 year = $320
Now,
∵ If the simple Interest is $320, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/320 years
∴ If the simple Interest is $1920, then the time = 1/320 × 1920 years
= 1 × 1920/320 years
= 1920/320 = 6 years
Thus, time (T) = 6 years Answer
Similar Questions
(1) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 4 years.
(2) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 6% simple interest?
(3) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(4) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 6% simple interest?
(5) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.
(6) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 10% simple interest?
(8) How much loan did Robert borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5865 to clear it?
(9) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 6% simple interest?
(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.