mcqs Math Simple Interest David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan. 7530

Question: David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.

(A)  5.25
(B)  8.75
(C)  7
(D)  10.5

Correct Answer 7

Solution And Explanation

Solution

Given,

Principal (P) = $4800

Rate of Simple Interest (R) = 9% per annum

Amount (A) = $7824

Thus, time (T) = ?

Method (1) Using Formula

We know that, Amount (A) = Principal (P) + Simple Interest (SI)

⇒ Simple Interest (SI) = Amount – Principal

⇒ SI = $7824 – $4800 = $3024

Thus, Simple Interest = $3024

Time (T) = ^{100 × Simple Interest}/_{Principal × Rate of Interest}

⇒ T = ^{100 × SI}/_{P × R}

Thus, Time (T) = ^{100 × 3024}/_{4800 × 9}

= ³⁰²⁴⁰⁰/₄₃₂₀₀

= 7 years (using formula)

Thus, Time (T) = 7 years (from time taken before calculation)Answer

Here, we have

Principal (P) = $4800

Rate of Simple Interest (R) = 9% per annum

Simple Interest = $3024 (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 $4800

= ⁹/₁₀₀ × 4800

= ^{9 × 4800}/₁₀₀

= ⁴³²⁰⁰/₁₀₀ = 432

Thus, simple Interest for 1 year = $432

Now,

∵ If the simple Interest is $432, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₃₂ years

∴ If the simple Interest is $3024, then the time = ¹/₄₃₂ × 3024 years

= ^{1 × 3024}/₄₃₂ years

= ³⁰²⁴/₄₃₂ = 7 years

Thus, time (T) = 7 years Answer