Question:
Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $4600
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $7176
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 = $7176 – $4600 = $2576
Thus, Simple Interest = $2576
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 × 2576/4600 × 8
= 257600/36800
= 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) = $4600
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $2576 (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 $4600
= 8/100 × 4600
= 8 × 4600/100
= 36800/100 = 368
Thus, simple Interest for 1 year = $368
Now,
∵ If the simple Interest is $368, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/368 years
∴ If the simple Interest is $2576, then the time = 1/368 × 2576 years
= 1 × 2576/368 years
= 2576/368 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 7 years.
(2) Calculate the amount due after 9 years if Christopher borrowed a sum of $6000 at a rate of 3% simple interest.
(3) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 4% simple interest?
(4) Margaret had to pay $5002.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 3 years.
(6) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 7% simple interest.
(7) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 9% simple interest.
(8) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 3% simple interest for 7 years.
(10) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.