Question:
Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
Correct Answer
6
Solution And Explanation
Solution
Given,
Principal (P) = $6500
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $9620
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 = $9620 – $6500 = $3120
Thus, Simple Interest = $3120
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 × 3120/6500 × 8
= 312000/52000
= 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) = $6500
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $3120 (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 $6500
= 8/100 × 6500
= 8 × 6500/100
= 52000/100 = 520
Thus, simple Interest for 1 year = $520
Now,
∵ If the simple Interest is $520, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/520 years
∴ If the simple Interest is $3120, then the time = 1/520 × 3120 years
= 1 × 3120/520 years
= 3120/520 = 6 years
Thus, time (T) = 6 years Answer
Similar Questions
(1) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 4% simple interest.
(2) Find the amount to be paid if David borrowed a sum of $5400 at 9% simple interest for 7 years.
(3) In how much time a principal of $3150 will amount to $3622.5 at a simple interest of 3% per annum?
(4) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.
(5) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 9% simple interest?
(6) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?
(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 4 years.
(8) 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.
(9) Calculate the amount due if Christopher borrowed a sum of $4000 at 8% simple interest for 4 years.
(10) Charles had to pay $4134 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.