mcqs Math Simple Interest Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan. 7959

Question: Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.

(A)  7.5
(B)  12.5
(C)  10
(D)  15

Correct Answer 10

Solution And Explanation

Solution

Given,

Principal (P) = $4300

Rate of Simple Interest (R) = 8% per annum

Amount (A) = $7740

Thus, time (T) = ?

Method (1) Using Formula

We know that, Amount (A) = Principal (P) + Simple Interest (SI)

⇒ Simple Interest (SI) = Amount – Principal

⇒ SI = $7740 – $4300 = $3440

Thus, Simple Interest = $3440

Time (T) = ^{100 × Simple Interest}/_{Principal × Rate of Interest}

⇒ T = ^{100 × SI}/_{P × R}

Thus, Time (T) = ^{100 × 3440}/_{4300 × 8}

= ³⁴⁴⁰⁰⁰/₃₄₄₀₀

= 10 years (using formula)

Thus, Time (T) = 10 years (from time taken before calculation)Answer

Here, we have

Principal (P) = $4300

Rate of Simple Interest (R) = 8% per annum

Simple Interest = $3440 (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 $4300

= ⁸/₁₀₀ × 4300

= ^{8 × 4300}/₁₀₀

= ³⁴⁴⁰⁰/₁₀₀ = 344

Thus, simple Interest for 1 year = $344

Now,

∵ If the simple Interest is $344, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₃₄₄ years

∴ If the simple Interest is $3440, then the time = ¹/₃₄₄ × 3440 years

= ^{1 × 3440}/₃₄₄ years

= ³⁴⁴⁰/₃₄₄ = 10 years

Thus, time (T) = 10 years Answer