Simple Interest
MCQs Math

Question:     Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7668 to clear the loan, then find the time period of the loan.

Correct Answer  7

Solution And Explanation

Solution

Given,

Principal (P) = $5400

Rate of Simple Interest (R) = 6% per annum

Amount (A) = $7668

Thus, time (T) = ?

Method (1) Using Formula

Calculation of Simple Interest, when Principal and Amount are given

Formual 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 = $7668 – $5400 = $2268

Thus, Simple Interest = $2268

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 × 2268}/_{5400 × 6}

= ²²⁶⁸⁰⁰/₃₂₄₀₀

= 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) = $5400

Rate of Simple Interest (R) = 6% per annum

Simple Interest = $2268 (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 $5400

= ⁶/₁₀₀ × 5400

= ^{6 × 5400}/₁₀₀

= ³²⁴⁰⁰/₁₀₀ = 324

Thus, simple Interest for 1 year = $324

Now,

∵ If the simple Interest is $324, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₂₄ years

∴ If the simple Interest is $2268, then the time = ¹/₃₂₄ × 2268 years

= ^{1 × 2268}/₃₂₄ years

= ²²⁶⁸/₃₂₄ = 7 years

Thus, time (T) = 7 years Answer

Similar Questions

(1) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 3 years.

(2) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(3) How much loan did Paul borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7370 to clear it?

(4) If Michael borrowed $3300 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(5) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 10% simple interest.

(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 4% simple interest for 8 years.

(7) What amount does William have to pay after 5 years if he takes a loan of $3500 at 3% simple interest?

(8) Steven had to pay $5152 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.

(9) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 6% simple interest?

(10) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 8 years.