Question:
Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
Correct Answer
9
Solution And Explanation
Solution
Given,
Principal (P) = $5400
Rate of Simple Interest (R) = 7% per annum
Amount (A) = $8802
Thus, time (T) = ?
Method (1) Using Formula
Calculation of Simple Interest, when Principal and Amount are given
Formual 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 = $8802 – $5400 = $3402
Thus, Simple Interest = $3402
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 × 3402/5400 × 7
= 340200/37800
= 9 years (using formula)
Thus, Time (T) = 9 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) = $5400
Rate of Simple Interest (R) = 7% per annum
Simple Interest = $3402 (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 = 7% of Principal
= 7% of $5400
= 7/100 × 5400
= 7 × 5400/100
= 37800/100 = 378
Thus, simple Interest for 1 year = $378
Now,
∵ If the simple Interest is $378, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/378 years
∴ If the simple Interest is $3402, then the time = 1/378 × 3402 years
= 1 × 3402/378 years
= 3402/378 = 9 years
Thus, time (T) = 9 years Answer
Similar Questions
(1) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $10921 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.
(3) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?
(4) How much loan did Andrew borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7820 to clear it?
(5) David had to pay $3604 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) How much loan did Kenneth borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8400 to clear it?
(7) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?
(8) Find the amount to be paid if Christopher borrowed a sum of $6000 at 2% simple interest for 7 years.
(9) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 3% simple interest?
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 2% simple interest for 7 years.