Question:
Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $8344 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $5600
Rate of Simple Interest (R) = 7% per annum
Amount (A) = $8344
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 = $8344 – $5600 = $2744
Thus, Simple Interest = $2744
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 × 2744/5600 × 7
= 274400/39200
= 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) = $5600
Rate of Simple Interest (R) = 7% per annum
Simple Interest = $2744 (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 $5600
= 7/100 × 5600
= 7 × 5600/100
= 39200/100 = 392
Thus, simple Interest for 1 year = $392
Now,
∵ If the simple Interest is $392, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/392 years
∴ If the simple Interest is $2744, then the time = 1/392 × 2744 years
= 1 × 2744/392 years
= 2744/392 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 7 years.
(2) If Michelle paid $5940 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Lisa took a loan of $6100 at the rate of 9% simple interest per annum. If he paid an amount of $10492 to clear the loan, then find the time period of the loan.
(4) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 8% simple interest?
(5) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 7% simple interest.
(6) How much loan did Brian borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8280 to clear it?
(7) Emily had to pay $5462.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $8326 to clear the loan, then find the time period of the loan.
(9) How much loan did Edward borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8740 to clear it?
(10) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6880 to clear the loan, then find the time period of the loan.