Question:
Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.
Correct Answer
8
Solution And Explanation
Solution
Given,
Principal (P) = $5900
Rate of Simple Interest (R) = 10% per annum
Amount (A) = $10620
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 = $10620 – $5900 = $4720
Thus, Simple Interest = $4720
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 × 4720/5900 × 10
= 472000/59000
= 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) = $5900
Rate of Simple Interest (R) = 10% per annum
Simple Interest = $4720 (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 $5900
= 10/100 × 5900
= 10 × 5900/100
= 59000/100 = 590
Thus, simple Interest for 1 year = $590
Now,
∵ If the simple Interest is $590, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/590 years
∴ If the simple Interest is $4720, then the time = 1/590 × 4720 years
= 1 × 4720/590 years
= 4720/590 = 8 years
Thus, time (T) = 8 years Answer
Similar Questions
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(2) Find the amount to be paid if Robert borrowed a sum of $5100 at 8% simple interest for 7 years.
(3) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 5% simple interest?
(4) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
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(7) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 4 years.
(8) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8050 to clear it?
(9) How much loan did Joshua borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7590 to clear it?
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