Simple Interest
MCQs Math

Question:     Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $11520 to clear the loan, then find the time period of the loan.

Correct Answer  10

Solution And Explanation

Solution

Given,

Principal (P) = $6400

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

Amount (A) = $11520

Thus, time (T) = ?

Method (1) Using Formula

Calculation of Simple Interest, when Principal and Amount are given

Formual 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 = $11520 – $6400 = $5120

Thus, Simple Interest = $5120

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 × 5120}/_{6400 × 8}

= ⁵¹²⁰⁰⁰/₅₁₂₀₀

= 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) = $6400

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

Simple Interest = $5120 (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 $6400

= ⁸/₁₀₀ × 6400

= ^{8 × 6400}/₁₀₀

= ⁵¹²⁰⁰/₁₀₀ = 512

Thus, simple Interest for 1 year = $512

Now,

∵ If the simple Interest is $512, then the time = 1 year

∴ If the simple Interest is $1, then the time = ¹/₅₁₂ years

∴ If the simple Interest is $5120, then the time = ¹/₅₁₂ × 5120 years

= ^{1 × 5120}/₅₁₂ years

= ⁵¹²⁰/₅₁₂ = 10 years

Thus, time (T) = 10 years Answer

Similar Questions

(1) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 8 years.

(2) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 8% simple interest.

(3) How much loan did Timothy borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8140 to clear it?

(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 7 years.

(5) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 4% simple interest.

(6) If Elizabeth borrowed $3450 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(7) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 6% simple interest?

(8) Find the amount to be paid if James borrowed a sum of $5000 at 5% simple interest for 8 years.

(9) If Donald paid $5040 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(10) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 6% simple interest?