Question:
James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $5960 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (R) = 7% per annum
Amount (A) = $5960
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 = $5960 – $4000 = $1960
Thus, Simple Interest = $1960
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 × 1960/4000 × 7
= 196000/28000
= 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) = $4000
Rate of Simple Interest (R) = 7% per annum
Simple Interest = $1960 (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 = 7% of Principal
= 7% of $4000
= 7/100 × 4000
= 7 × 4000/100
= 28000/100 = 280
Thus, simple Interest for 1 year = $280
Now,
∵ If the simple Interest is $280, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/280 years
∴ If the simple Interest is $1960, then the time = 1/280 × 1960 years
= 1 × 1960/280 years
= 1960/280 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?
(2) Robert had to pay $3379 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(5) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 8% simple interest?
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 2% simple interest for 4 years.
(7) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 8 years.
(8) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 7% simple interest?
(10) 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.