Question:
James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $7200 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) = 10% per annum
Amount (A) = $7200
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 = $7200 – $4000 = $3200
Thus, Simple Interest = $3200
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 × 3200/4000 × 10
= 320000/40000
= 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) = 10% per annum
Simple Interest = $3200 (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 = 10% of Principal
= 10% of $4000
= 10/100 × 4000
= 10 × 4000/100
= 40000/100 = 400
Thus, simple Interest for 1 year = $400
Now,
∵ If the simple Interest is $400, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/400 years
∴ If the simple Interest is $3200, then the time = 1/400 × 3200 years
= 1 × 3200/400 years
= 3200/400 = 8 years
Thus, time (T) = 8 years Answer
Similar Questions
(1) Find the amount to be paid if Richard borrowed a sum of $5600 at 4% simple interest for 7 years.
(2) What amount will be due after 2 years if John borrowed a sum of $3100 at a 7% simple interest?
(3) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?
(4) If Steven paid $5520 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) How much loan did Kevin borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8520 to clear it?
(6) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8140 to clear the loan, then find the time period of the loan.
(7) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $11900 to clear the loan, then find the time period of the loan.
(8) If Charles borrowed $3900 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(9) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.
(10) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.