Question:
Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6674 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $4700
Rate of Simple Interest (R) = 6% per annum
Amount (A) = $6674
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 = $6674 – $4700 = $1974
Thus, Simple Interest = $1974
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 × 1974/4700 × 6
= 197400/28200
= 7 years (using formula)
Thus, Time (T) = 7 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) = $4700
Rate of Simple Interest (R) = 6% per annum
Simple Interest = $1974 (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 = 6% of Principal
= 6% of $4700
= 6/100 × 4700
= 6 × 4700/100
= 28200/100 = 282
Thus, simple Interest for 1 year = $282
Now,
∵ If the simple Interest is $282, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/282 years
∴ If the simple Interest is $1974, then the time = 1/282 × 1974 years
= 1 × 1974/282 years
= 1974/282 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 8 years.
(3) How much loan did Anthony borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7875 to clear it?
(4) In how much time a principal of $3000 will amount to $3750 at a simple interest of 5% per annum?
(5) How much loan did Brian borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7920 to clear it?
(6) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 4 years.
(7) How much loan did Charles borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6490 to clear it?
(8) If Robert paid $3720 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(9) What amount does William have to pay after 6 years if he takes a loan of $3500 at 6% simple interest?
(10) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 3% simple interest?