Question:
Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $12060 to clear the loan, then find the time period of the loan.
Correct Answer
10
Solution And Explanation
Solution
Given,
Principal (P) = $6700
Rate of Simple Interest (R) = 8% per annum
Amount (A) = $12060
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 = $12060 – $6700 = $5360
Thus, Simple Interest = $5360
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 × 5360/6700 × 8
= 536000/53600
= 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) = $6700
Rate of Simple Interest (R) = 8% per annum
Simple Interest = $5360 (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 $6700
= 8/100 × 6700
= 8 × 6700/100
= 53600/100 = 536
Thus, simple Interest for 1 year = $536
Now,
∵ If the simple Interest is $536, then the time = 1 year
∴ If the simple Interest is $1, then the time = 1/536 years
∴ If the simple Interest is $5360, then the time = 1/536 × 5360 years
= 1 × 5360/536 years
= 5360/536 = 10 years
Thus, time (T) = 10 years Answer
Similar Questions
(1) If Emily paid $5700 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(3) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $10920 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Christopher borrowed a sum of $4000 at 6% simple interest for 3 years.
(5) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.
(6) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(7) How much loan did Margaret borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7620 to clear it?
(8) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.
(10) If Sarah borrowed $3850 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.