mcqs Math Simple Interest Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan. 7576

Question: Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10710 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) = $6300

Rate of Simple Interest (R) = 10% per annum

Amount (A) = $10710

Thus, time (T) = ?

Method (1) Using Formula

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

⇒ Simple Interest (SI) = Amount – Principal

⇒ SI = $10710 – $6300 = $4410

Thus, Simple Interest = $4410

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

⇒ T = ^{100 × SI}/_{P × R}

Thus, Time (T) = ^{100 × 4410}/_{6300 × 10}

= ⁴⁴¹⁰⁰⁰/₆₃₀₀₀

= 7 years (using formula)

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

Here, we have

Principal (P) = $6300

Rate of Simple Interest (R) = 10% per annum

Simple Interest = $4410 (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 $6300

= ¹⁰/₁₀₀ × 6300

= ^{10 × 6300}/₁₀₀

= ⁶³⁰⁰⁰/₁₀₀ = 630

Thus, simple Interest for 1 year = $630

Now,

∵ If the simple Interest is $630, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₆₃₀ years

∴ If the simple Interest is $4410, then the time = ¹/₆₃₀ × 4410 years

= ^{1 × 4410}/₆₃₀ years

= ⁴⁴¹⁰/₆₃₀ = 7 years

Thus, time (T) = 7 years Answer