Question:
Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $6900
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $10764
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 = $10764 – $6900 = $3864
Thus, Simple Interest = $3864
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 × 3864/6900 × 8
= 386400/55200
= 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) = $6900
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $3864 (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 $6900
= 8/100 × 6900
= 8 × 6900/100
= 55200/100 = 552
Thus, simple Interest for 1 year = $552
Now,
∵ If the simple Interest is $552, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/552 years
∴ If the simple Interest is $3864, then the time = 1/552 × 3864 years
= 1 × 3864/552 years
= 3864/552 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 8% simple interest?
(2) Steven had to pay $5290 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) Donna had to pay $5141 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 5% simple interest?
(5) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $11560 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Sarah borrowed a sum of $3850 at 6% simple interest for 4 years.
(7) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(8) In how much time a principal of $3150 will amount to $3433.5 at a simple interest of 3% per annum?
(9) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?
(10) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.