Question:
James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $6520 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (R) = 9% per annum
Amount (A) = $6520
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 = $6520 – $4000 = $2520
Thus, Simple Interest = $2520
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 × 2520/4000 × 9
= 252000/36000
= 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) = $4000
Rate of Simple Interest (R) = 9% per annum
Simple Interest = $2520 (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 = 9% of Principal
= 9% of $4000
= 9/100 × 4000
= 9 × 4000/100
= 36000/100 = 360
Thus, simple Interest for 1 year = $360
Now,
∵ If the simple Interest is $360, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/360 years
∴ If the simple Interest is $2520, then the time = 1/360 × 2520 years
= 1 × 2520/360 years
= 2520/360 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 10% simple interest for 3 years.
(2) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.
(3) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 9% simple interest?
(4) Calculate the amount due if William borrowed a sum of $3500 at 9% simple interest for 4 years.
(5) Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $10498 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if John borrowed a sum of $5200 at 7% simple interest for 8 years.
(8) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 3% simple interest.
(9) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $9976 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 7 years.