Question:
Jennifer took a loan of $4500 at the rate of 7% simple interest per annum. If he paid an amount of $6705 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $4500
Rate of Simple Interest (R) = 7% per annum
Amount (A) = $6705
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 = $6705 – $4500 = $2205
Thus, Simple Interest = $2205
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 × 2205/4500 × 7
= 220500/31500
= 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) = $4500
Rate of Simple Interest (R) = 7% per annum
Simple Interest = $2205 (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 $4500
= 7/100 × 4500
= 7 × 4500/100
= 31500/100 = 315
Thus, simple Interest for 1 year = $315
Now,
∵ If the simple Interest is $315, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/315 years
∴ If the simple Interest is $2205, then the time = 1/315 × 2205 years
= 1 × 2205/315 years
= 2205/315 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 10% simple interest.
(2) What amount will be due after 2 years if William borrowed a sum of $3250 at a 8% simple interest?
(3) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 7% simple interest.
(4) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 4% simple interest?
(5) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(6) How much loan did George borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8760 to clear it?
(7) How much loan did Jeffrey borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8580 to clear it?
(8) Find the amount to be paid if Richard borrowed a sum of $5600 at 9% simple interest for 8 years.
(9) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 9% simple interest.
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 7 years.