Question:
Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6958 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $4900
Rate of Simple Interest (R) = 6% per annum
Amount (A) = $6958
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 = $6958 – $4900 = $2058
Thus, Simple Interest = $2058
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 × 2058/4900 × 6
= 205800/29400
= 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) = $4900
Rate of Simple Interest (R) = 6% per annum
Simple Interest = $2058 (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 $4900
= 6/100 × 4900
= 6 × 4900/100
= 29400/100 = 294
Thus, simple Interest for 1 year = $294
Now,
∵ If the simple Interest is $294, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/294 years
∴ If the simple Interest is $2058, then the time = 1/294 × 2058 years
= 1 × 2058/294 years
= 2058/294 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 7 years.
(2) Steven had to pay $5290 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) What amount does John have to pay after 6 years if he takes a loan of $3200 at 2% simple interest?
(4) Matthew took a loan of $6400 at the rate of 6% simple interest per annum. If he paid an amount of $9088 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 8 years.
(6) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5995 to clear it?
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 9% simple interest for 8 years.
(8) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 8 years.
(9) Calculate the amount due if Thomas borrowed a sum of $3800 at 9% simple interest for 4 years.
(10) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.