Question:
Elizabeth took a loan of $4900 at the rate of 9% simple interest per annum. If he paid an amount of $7987 to clear the loan, then find the time period of the loan.
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $4900
Rate of Simple Interest (R) = 9% per annum
Amount (A) = $7987
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 = $7987 – $4900 = $3087
Thus, Simple Interest = $3087
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 × 3087/4900 × 9
= 308700/44100
= 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) = $4900
Rate of Simple Interest (R) = 9% per annum
Simple Interest = $3087 (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 $4900
= 9/100 × 4900
= 9 × 4900/100
= 44100/100 = 441
Thus, simple Interest for 1 year = $441
Now,
∵ If the simple Interest is $441, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/441 years
∴ If the simple Interest is $3087, then the time = 1/441 × 3087 years
= 1 × 3087/441 years
= 3087/441 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 4 years.
(2) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 10% simple interest.
(3) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 5% simple interest?
(4) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 10% simple interest?
(5) How much loan did Karen borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7140 to clear it?
(6) How much loan did Margaret borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7937.5 to clear it?
(7) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Jennifer borrowed a sum of $3250 at 9% simple interest for 3 years.
(9) Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 4 years.
(10) If Michael paid $3960 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.