mcqs Math Simple Interest John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan. 7495

Question: John took a loan of $4400 at the rate of 8% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.

(A)  5.25
(B)  8.75
(C)  7
(D)  10.5

Correct Answer 7

Solution And Explanation

Solution

Given,

Principal (P) = $4400

Rate of Simple Interest (R) = 8% per annum

Amount (A) = $6864

Thus, time (T) = ?

Method (1) Using Formula

We know that, Amount (A) = Principal (P) + Simple Interest (SI)

⇒ Simple Interest (SI) = Amount – Principal

⇒ SI = $6864 – $4400 = $2464

Thus, Simple Interest = $2464

Time (T) = ^{100 × Simple Interest}/_{Principal × Rate of Interest}

⇒ T = ^{100 × SI}/_{P × R}

Thus, Time (T) = ^{100 × 2464}/_{4400 × 8}

= ²⁴⁶⁴⁰⁰/₃₅₂₀₀

= 7 years (using formula)

Thus, Time (T) = 7 years (from time taken before calculation)Answer

Here, we have

Principal (P) = $4400

Rate of Simple Interest (R) = 8% per annum

Simple Interest = $2464 (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 = 8% of Principal

= 8% of $4400

= ⁸/₁₀₀ × 4400

= ^{8 × 4400}/₁₀₀

= ³⁵²⁰⁰/₁₀₀ = 352

Thus, simple Interest for 1 year = $352

Now,

∵ If the simple Interest is $352, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₅₂ years

∴ If the simple Interest is $2464, then the time = ¹/₃₅₂ × 2464 years

= ^{1 × 2464}/₃₅₂ years

= ²⁴⁶⁴/₃₅₂ = 7 years

Thus, time (T) = 7 years Answer