Question:
Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.
Correct Answer
9
Solution And Explanation
Solution
Given,
Principal (P) = $4600
Rate of Simple Interest (R) = 10% per annum
Amount (A) = $8740
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 = $8740 – $4600 = $4140
Thus, Simple Interest = $4140
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 × 4140/4600 × 10
= 414000/46000
= 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) = $4600
Rate of Simple Interest (R) = 10% per annum
Simple Interest = $4140 (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 $4600
= 10/100 × 4600
= 10 × 4600/100
= 46000/100 = 460
Thus, simple Interest for 1 year = $460
Now,
∵ If the simple Interest is $460, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/460 years
∴ If the simple Interest is $4140, then the time = 1/460 × 4140 years
= 1 × 4140/460 years
= 4140/460 = 9 years
Thus, time (T) = 9 years Answer
Similar Questions
(1) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 9% simple interest for 8 years.
(2) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 7 years.
(3) In how much time a principal of $3100 will amount to $3720 at a simple interest of 5% per annum?
(4) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
(5) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $6816 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 7% simple interest for 7 years.
(7) How much loan did Linda borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6420 to clear it?
(8) John had to pay $3488 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(10) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.