Question:
Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $8944 to clear the loan, then find the time period of the loan.
Correct Answer
9
Solution And Explanation
Solution
Given,
Principal (P) = $5200
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $8944
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 = $8944 – $5200 = $3744
Thus, Simple Interest = $3744
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 × 3744/5200 × 8
= 374400/41600
= 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) = $5200
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $3744 (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 = 8% of Principal
= 8% of $5200
= 8/100 × 5200
= 8 × 5200/100
= 41600/100 = 416
Thus, simple Interest for 1 year = $416
Now,
∵ If the simple Interest is $416, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/416 years
∴ If the simple Interest is $3744, then the time = 1/416 × 3744 years
= 1 × 3744/416 years
= 3744/416 = 9 years
Thus, time (T) = 9 years Answer
Similar Questions
(1) If Jennifer borrowed $3250 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) If Charles paid $4212 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 8% simple interest?
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 7 years.
(5) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $11220 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 7% simple interest for 4 years.
(8) Calculate the amount due if Karen borrowed a sum of $3950 at 10% simple interest for 3 years.
(9) Thomas had to pay $4028 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(10) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $10010 to clear the loan, then find the time period of the loan.