Question:
Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $12670 to clear the loan, then find the time period of the loan.
Correct Answer
9
Solution And Explanation
Solution
Given,
Principal (P) = $7000
Rate of Simple Interest (R) = 9% per annum
Amount (A) = $12670
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 = $12670 – $7000 = $5670
Thus, Simple Interest = $5670
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 × 5670/7000 × 9
= 567000/63000
= 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) = $7000
Rate of Simple Interest (R) = 9% per annum
Simple Interest = $5670 (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 = 9% of Principal
= 9% of $7000
= 9/100 × 7000
= 9 × 7000/100
= 63000/100 = 630
Thus, simple Interest for 1 year = $630
Now,
∵ If the simple Interest is $630, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/630 years
∴ If the simple Interest is $5670, then the time = 1/630 × 5670 years
= 1 × 5670/630 years
= 5670/630 = 9 years
Thus, time (T) = 9 years Answer
Similar Questions
(1) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 3% simple interest?
(2) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.
(3) Calculate the amount due if Richard borrowed a sum of $3600 at 2% simple interest for 4 years.
(4) If Sarah paid $4158 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(5) How much loan did Betty borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7812.5 to clear it?
(6) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 9% simple interest?
(7) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 4 years.
(8) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 6% simple interest?
(9) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 3% simple interest?
(10) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 3% simple interest.