Question:
William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $7800 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $7800
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 = $7800 – $5000 = $2800
Thus, Simple Interest = $2800
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 × 2800/5000 × 8
= 280000/40000
= 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) = $5000
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $2800 (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 $5000
= 8/100 × 5000
= 8 × 5000/100
= 40000/100 = 400
Thus, simple Interest for 1 year = $400
Now,
∵ If the simple Interest is $400, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/400 years
∴ If the simple Interest is $2800, then the time = 1/400 × 2800 years
= 1 × 2800/400 years
= 2800/400 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 4 years.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 4 years.
(3) John had to pay $3488 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(5) How much loan did Ryan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9480 to clear it?
(6) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10400 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 9% simple interest for 3 years.
(8) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 3 years.
(9) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8046 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 7 years.