Question:
Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $4700
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $7332
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 = $7332 – $4700 = $2632
Thus, Simple Interest = $2632
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 × 2632/4700 × 8
= 263200/37600
= 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) = $4700
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $2632 (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 $4700
= 8/100 × 4700
= 8 × 4700/100
= 37600/100 = 376
Thus, simple Interest for 1 year = $376
Now,
∵ If the simple Interest is $376, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/376 years
∴ If the simple Interest is $2632, then the time = 1/376 × 2632 years
= 1 × 2632/376 years
= 2632/376 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) Calculate the amount due if Karen borrowed a sum of $3950 at 5% simple interest for 4 years.
(2) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $7344 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 7 years.
(4) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 9% simple interest?
(5) What amount does James have to pay after 6 years if he takes a loan of $3000 at 10% simple interest?
(6) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 7% simple interest?
(7) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 10% simple interest?
(8) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7897 to clear the loan, then find the time period of the loan.
(9) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 5% simple interest?
(10) If Michael borrowed $3300 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.