Question:
Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $9204 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $5900
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $9204
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 = $9204 – $5900 = $3304
Thus, Simple Interest = $3304
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 × 3304/5900 × 8
= 330400/47200
= 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) = $5900
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $3304 (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 $5900
= 8/100 × 5900
= 8 × 5900/100
= 47200/100 = 472
Thus, simple Interest for 1 year = $472
Now,
∵ If the simple Interest is $472, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/472 years
∴ If the simple Interest is $3304, then the time = 1/472 × 3304 years
= 1 × 3304/472 years
= 3304/472 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) How much loan did Michelle borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8340 to clear it?
(2) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.
(3) If Patricia paid $3654 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 3 years.
(5) What amount does James have to pay after 6 years if he takes a loan of $3000 at 6% simple interest?
(6) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 3 years.
(7) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 9% simple interest?
(8) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 8% simple interest?
(9) In how much time a principal of $3100 will amount to $3720 at a simple interest of 5% per annum?
(10) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 3 years.