Question:
William took a loan of $5000 at the rate of 7% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.
Correct Answer
10
Solution And Explanation
Solution
Given,
Principal (P) = $5000
Rate of Simple Interest (R) = 7% per annum
Amount (A) = $8500
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 = $8500 – $5000 = $3500
Thus, Simple Interest = $3500
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 × 3500/5000 × 7
= 350000/35000
= 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) = $5000
Rate of Simple Interest (R) = 7% per annum
Simple Interest = $3500 (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 $5000
= 7/100 × 5000
= 7 × 5000/100
= 35000/100 = 350
Thus, simple Interest for 1 year = $350
Now,
∵ If the simple Interest is $350, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/350 years
∴ If the simple Interest is $3500, then the time = 1/350 × 3500 years
= 1 × 3500/350 years
= 3500/350 = 10 years
Thus, time (T) = 10 years Answer
Similar Questions
(1) How much loan did Matthew borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7750 to clear it?
(2) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7498 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 9% simple interest?
(4) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(5) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 4 years.
(6) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 7% simple interest?
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 3% simple interest for 7 years.
(8) Find the amount to be paid if Christopher borrowed a sum of $6000 at 8% simple interest for 7 years.
(9) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 10% simple interest?
(10) In how much time a principal of $3150 will amount to $3780 at a simple interest of 5% per annum?