Question:
( 1 of 10 ) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(A) 4 47/50 Or, 247/50
(B) 8 47/50 Or, 447/50
(C) 4 141/50 Or, 341/50
(D) 4 94/50 Or, 294/50
You selected
10.5
Correct Answer
7
Solution And Explanation
Solution
Given,
Principal (P) = $4800
Rate of Simple Interest (R) = 10% per annum
Amount (A) = $8160
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 = $8160 – $4800 = $3360
Thus, Simple Interest = $3360
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 × 3360/4800 × 10
= 336000/48000
= 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) = $4800
Rate of Simple Interest (R) = 10% per annum
Simple Interest = $3360 (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 = 10% of Principal
= 10% of $4800
= 10/100 × 4800
= 10 × 4800/100
= 48000/100 = 480
Thus, simple Interest for 1 year = $480
Now,
∵ If the simple Interest is $480, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/480 years
∴ If the simple Interest is $3360, then the time = 1/480 × 3360 years
= 1 × 3360/480 years
= 3360/480 = 7 years
Thus, time (T) = 7 years Answer
Similar Questions
(1) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.
(2) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(3) How much loan did Ryan borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8690 to clear it?
(4) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 7% simple interest?
(5) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(6) If Sandra paid $4984 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) If Robert borrowed $3100 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(8) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?
(9) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(10) 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.