Question:
Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.
Correct Answer
10
Solution And Explanation
Solution
Given,
Principal (P) = $4900
Rate of Simple Interest (R) = 6% per annum
Amount (A) = $7840
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 = $7840 – $4900 = $2940
Thus, Simple Interest = $2940
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 × 2940/4900 × 6
= 294000/29400
= 10 years (using formula)
Thus, Time (T) = 10 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) = $4900
Rate of Simple Interest (R) = 6% per annum
Simple Interest = $2940 (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 = 6% of Principal
= 6% of $4900
= 6/100 × 4900
= 6 × 4900/100
= 29400/100 = 294
Thus, simple Interest for 1 year = $294
Now,
∵ If the simple Interest is $294, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/294 years
∴ If the simple Interest is $2940, then the time = 1/294 × 2940 years
= 1 × 2940/294 years
= 2940/294 = 10 years
Thus, time (T) = 10 years Answer
Similar Questions
(1) 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?
(2) How much loan did Donald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7150 to clear it?
(3) Calculate the amount due if Richard borrowed a sum of $3600 at 8% simple interest for 3 years.
(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 3 years.
(5) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $9600 to clear the loan, then find the time period of the loan.
(6) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10608 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Richard borrowed a sum of $5600 at 2% simple interest for 7 years.
(8) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 2% simple interest?
(9) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $11008 to clear the loan, then find the time period of the loan.
(10) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5775 to clear it?