Question:
Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8195 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $5500
Rate of Simple Interest (R) = 7% per annum
Amount (A) = $8195
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 = $8195 – $5500 = $2695
Thus, Simple Interest = $2695
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 × 2695/5500 × 7
= 269500/38500
= 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) = $5500
Rate of Simple Interest (R) = 7% per annum
Simple Interest = $2695 (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 $5500
= 7/100 × 5500
= 7 × 5500/100
= 38500/100 = 385
Thus, simple Interest for 1 year = $385
Now,
∵ If the simple Interest is $385, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/385 years
∴ If the simple Interest is $2695, then the time = 1/385 × 2695 years
= 1 × 2695/385 years
= 2695/385 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) How much loan did John borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5980 to clear it?
(2) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 7 years.
(3) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $8778 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Charles borrowed a sum of $3900 at 7% simple interest for 4 years.
(6) How much loan did Paul borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8375 to clear it?
(7) If Richard borrowed $3600 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.
(9) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $8313 to clear the loan, then find the time period of the loan.
(10) If Kimberly paid $5022 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.