mcqs Math Simple Interest Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7560 to clear the loan, then find the time period of the loan. 7710

Question: Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $7560 to clear the loan, then find the time period of the loan.

(A)  6
(B)  10
(C)  8
(D)  12

Correct Answer 8

Solution And Explanation

Solution

Given,

Principal (P) = $4200

Rate of Simple Interest (R) = 10% per annum

Amount (A) = $7560

Thus, time (T) = ?

Method (1) Using Formula

We know that, Amount (A) = Principal (P) + Simple Interest (SI)

⇒ Simple Interest (SI) = Amount – Principal

⇒ SI = $7560 – $4200 = $3360

Thus, Simple Interest = $3360

Time (T) = ^{100 × Simple Interest}/_{Principal × Rate of Interest}

⇒ T = ^{100 × SI}/_{P × R}

Thus, Time (T) = ^{100 × 3360}/_{4200 × 10}

= ³³⁶⁰⁰⁰/₄₂₀₀₀

= 8 years (using formula)

Thus, Time (T) = 8 years (from time taken before calculation)Answer

Here, we have

Principal (P) = $4200

Rate of Simple Interest (R) = 10% per annum

Simple Interest = $3360 (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 $4200

= ¹⁰/₁₀₀ × 4200

= ^{10 × 4200}/₁₀₀

= ⁴²⁰⁰⁰/₁₀₀ = 420

Thus, simple Interest for 1 year = $420

Now,

∵ If the simple Interest is $420, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₄₂₀ years

∴ If the simple Interest is $3360, then the time = ¹/₄₂₀ × 3360 years

= ^{1 × 3360}/₄₂₀ years

= ³³⁶⁰/₄₂₀ = 8 years

Thus, time (T) = 8 years Answer