Question:
Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
Correct Answer
8
Solution And Explanation
Solution
Given,
Principal (P) = $7000
Rate of Simple Interest (R) = 10% per annum
Amount (A) = $12600
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 = $12600 – $7000 = $5600
Thus, Simple Interest = $5600
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 × 5600/7000 × 10
= 560000/70000
= 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) = $7000
Rate of Simple Interest (R) = 10% per annum
Simple Interest = $5600 (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 $7000
= 10/100 × 7000
= 10 × 7000/100
= 70000/100 = 700
Thus, simple Interest for 1 year = $700
Now,
∵ If the simple Interest is $700, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/700 years
∴ If the simple Interest is $5600, then the time = 1/700 × 5600 years
= 1 × 5600/700 years
= 5600/700 = 8 years
Thus, time (T) = 8 years Answer
Similar Questions
(1) How much loan did Michelle borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8340 to clear it?
(2) What amount does James have to pay after 5 years if he takes a loan of $3000 at 6% simple interest?
(3) Calculate the amount due after 9 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 7 years.
(5) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 5% simple interest?
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 3 years.
(7) Donna had to pay $5286.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(8) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.
(9) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if John borrowed a sum of $3100 at a 6% simple interest?