Question:
Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $8520 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $6000
Rate of Simple Interest (R) = 6% per annum
Amount (A) = $8520
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 = $8520 – $6000 = $2520
Thus, Simple Interest = $2520
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 × 2520/6000 × 6
= 252000/36000
= 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) = $6000
Rate of Simple Interest (R) = 6% per annum
Simple Interest = $2520 (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 $6000
= 6/100 × 6000
= 6 × 6000/100
= 36000/100 = 360
Thus, simple Interest for 1 year = $360
Now,
∵ If the simple Interest is $360, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/360 years
∴ If the simple Interest is $2520, then the time = 1/360 × 2520 years
= 1 × 2520/360 years
= 2520/360 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) If Thomas paid $4408 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(2) Richard took a loan of $5200 at the rate of 10% simple interest per annum. If he paid an amount of $9880 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 8 years.
(4) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 7 years.
(5) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 8% simple interest.
(6) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.
(7) What amount does William have to pay after 6 years if he takes a loan of $3500 at 10% simple interest?
(8) What amount does David have to pay after 6 years if he takes a loan of $3400 at 4% simple interest?
(9) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 5% simple interest.