Question:
James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
Correct Answer
8
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (R) = 6% per annum
Amount (A) = $5920
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 = $5920 – $4000 = $1920
Thus, Simple Interest = $1920
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 × 1920/4000 × 6
= 192000/24000
= 8 years (using formula)
Thus, Time (T) = 8 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) = 6% per annum
Simple Interest = $1920 (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 = 6% of Principal
= 6% of $4000
= 6/100 × 4000
= 6 × 4000/100
= 24000/100 = 240
Thus, simple Interest for 1 year = $240
Now,
∵ If the simple Interest is $240, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/240 years
∴ If the simple Interest is $1920, then the time = 1/240 × 1920 years
= 1 × 1920/240 years
= 1920/240 = 8 years
Thus, time (T) = 8 years Answer
Similar Questions
(1) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 9% simple interest?
(2) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.
(3) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(4) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7956 to clear the loan, then find the time period of the loan.
(5) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(6) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $10320 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 5% simple interest for 8 years.
(9) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 6% simple interest.
(10) If Kimberly paid $5394 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.