Question:
Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8084 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) = 9% per annum
Amount (A) = $8084
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 = $8084 – $4700 = $3384
Thus, Simple Interest = $3384
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 × 3384/4700 × 9
= 338400/42300
= 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) = 9% per annum
Simple Interest = $3384 (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 = 9% of Principal
= 9% of $4700
= 9/100 × 4700
= 9 × 4700/100
= 42300/100 = 423
Thus, simple Interest for 1 year = $423
Now,
∵ If the simple Interest is $423, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/423 years
∴ If the simple Interest is $3384, then the time = 1/423 × 3384 years
= 1 × 3384/423 years
= 3384/423 = 8 years
Thus, time (T) = 8 years Answer
Similar Questions
(1) Calculate the amount due if David borrowed a sum of $3400 at 4% simple interest for 3 years.
(2) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 6% simple interest.
(3) Thomas had to pay $4256 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(5) Paul had to pay $5264 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 7 years.
(7) Find the amount to be paid if James borrowed a sum of $5000 at 3% simple interest for 7 years.
(8) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 8% simple interest?
(9) James took a loan of $4000 at the rate of 9% simple interest per annum. If he paid an amount of $7240 to clear the loan, then find the time period of the loan.
(10) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 4% simple interest?