Question:
Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9984 to clear the loan, then find the time period of the loan.
Correct Answer
8
Solution And Explanation
Solution
Given,
Principal (P) = $6400
Rate of Simple Interest (R) = 7% per annum
Amount (A) = $9984
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 = $9984 – $6400 = $3584
Thus, Simple Interest = $3584
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 × 3584/6400 × 7
= 358400/44800
= 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) = $6400
Rate of Simple Interest (R) = 7% per annum
Simple Interest = $3584 (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 $6400
= 7/100 × 6400
= 7 × 6400/100
= 44800/100 = 448
Thus, simple Interest for 1 year = $448
Now,
∵ If the simple Interest is $448, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/448 years
∴ If the simple Interest is $3584, then the time = 1/448 × 3584 years
= 1 × 3584/448 years
= 3584/448 = 8 years
Thus, time (T) = 8 years Answer
Similar Questions
(1) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 6% simple interest?
(2) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8305 to clear it?
(3) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 7% simple interest?
(4) Calculate the amount due if John borrowed a sum of $3200 at 3% simple interest for 4 years.
(5) How much loan did David borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6750 to clear it?
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(7) If Barbara borrowed $3550 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(8) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 2% simple interest for 8 years.
(10) In how much time a principal of $3000 will amount to $3450 at a simple interest of 5% per annum?