Question:
Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7252 to clear the loan, then find the time period of the loan.
Correct Answer
6
Solution And Explanation
Solution
Given,
Principal (P) = $4900
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $7252
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 = $7252 – $4900 = $2352
Thus, Simple Interest = $2352
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 × 2352/4900 × 8
= 235200/39200
= 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) = $4900
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $2352 (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 $4900
= 8/100 × 4900
= 8 × 4900/100
= 39200/100 = 392
Thus, simple Interest for 1 year = $392
Now,
∵ If the simple Interest is $392, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/392 years
∴ If the simple Interest is $2352, then the time = 1/392 × 2352 years
= 1 × 2352/392 years
= 2352/392 = 6 years
Thus, time (T) = 6 years Answer
Similar Questions
(1) How much loan did Sharon borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8525 to clear it?
(2) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 7 years.
(3) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $13300 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3200 will amount to $3840 at a simple interest of 5% per annum?
(5) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 3 years.
(7) How much loan did Patricia borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5922.5 to clear it?
(8) If Karen paid $4266 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Patricia had to pay $3528 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(10) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6556 to clear the loan, then find the time period of the loan.