Question:
Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7332 to clear the loan, then find the time period of the loan.
Correct Answer
8
Solution And Explanation
Solution
Given,
Principal (P) = $4700
Rate of Simple Interest (R) = 7% per annum
Amount (A) = $7332
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 = $7332 – $4700 = $2632
Thus, Simple Interest = $2632
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 × 2632/4700 × 7
= 263200/32900
= 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) = $4700
Rate of Simple Interest (R) = 7% per annum
Simple Interest = $2632 (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 $4700
= 7/100 × 4700
= 7 × 4700/100
= 32900/100 = 329
Thus, simple Interest for 1 year = $329
Now,
∵ If the simple Interest is $329, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/329 years
∴ If the simple Interest is $2632, then the time = 1/329 × 2632 years
= 1 × 2632/329 years
= 2632/329 = 8 years
Thus, time (T) = 8 years Answer
Similar Questions
(1) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 3 years.
(2) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $10626 to clear the loan, then find the time period of the loan.
(3) How much loan did Emily borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8100 to clear it?
(4) How much loan did Jason borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9625 to clear it?
(5) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 9% simple interest?
(6) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(7) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $8424 to clear the loan, then find the time period of the loan.
(8) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(9) Susan took a loan of $5300 at the rate of 6% simple interest per annum. If he paid an amount of $7844 to clear the loan, then find the time period of the loan.
(10) How much loan did Carol borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8812.5 to clear it?