Question:
( 1 of 10 ) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
12
Correct Answer
8
Solution And Explanation
Solution
Given,
Principal (P) = $4000
Rate of Simple Interest (R) = 7% per annum
Amount (A) = $6240
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 = $6240 – $4000 = $2240
Thus, Simple Interest = $2240
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 × 2240/4000 × 7
= 224000/28000
= 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) = 7% per annum
Simple Interest = $2240 (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 = 7% of Principal
= 7% of $4000
= 7/100 × 4000
= 7 × 4000/100
= 28000/100 = 280
Thus, simple Interest for 1 year = $280
Now,
∵ If the simple Interest is $280, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/280 years
∴ If the simple Interest is $2240, then the time = 1/280 × 2240 years
= 1 × 2240/280 years
= 2240/280 = 8 years
Thus, time (T) = 8 years Answer
Similar Questions
(1) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10980 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 8 years.
(3) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 2% simple interest.
(4) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.
(5) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $7400 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 4% simple interest for 7 years.
(7) How much loan did Sarah borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7312.5 to clear it?
(8) How much loan did Melissa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8085 to clear it?
(9) How much loan did Sandra borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7417.5 to clear it?
(10) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 9% simple interest?