Question:
Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
Correct Answer
6
Solution And Explanation
Solution
Given,
Principal (P) = $6800
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $10064
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 = $10064 – $6800 = $3264
Thus, Simple Interest = $3264
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 × 3264/6800 × 8
= 326400/54400
= 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) = $6800
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $3264 (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 $6800
= 8/100 × 6800
= 8 × 6800/100
= 54400/100 = 544
Thus, simple Interest for 1 year = $544
Now,
∵ If the simple Interest is $544, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/544 years
∴ If the simple Interest is $3264, then the time = 1/544 × 3264 years
= 1 × 3264/544 years
= 3264/544 = 6 years
Thus, time (T) = 6 years Answer
Similar Questions
(1) How much loan did Karen borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7437.5 to clear it?
(2) Calculate the amount due if Charles borrowed a sum of $3900 at 2% simple interest for 4 years.
(3) In how much time a principal of $3200 will amount to $3328 at a simple interest of 2% per annum?
(4) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $8145 to clear the loan, then find the time period of the loan.
(5) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 10% simple interest?
(6) Sandra took a loan of $6900 at the rate of 10% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.
(7) What amount does William have to pay after 5 years if he takes a loan of $3500 at 7% simple interest?
(8) How much loan did Michelle borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7645 to clear it?
(9) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(10) William had to pay $4025 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.